Cyrus Mistry, was a surprise choice to succeed Ratan Tata as a Chairman of the Tata Group back in 2012. His exit on Monday too was a shock for many. The issue of his removal was not listed on agenda in the meeting of the board that took place on Monday but was taken up under the ‘any other items’ category.
As per a report in the NDTV, Mistry’s removal led to acrimonious, unprecedented scenes inside the boardroom. Protesting against the sudden decision of his removal, he reportedly pointed out that as per rules in Tata group, a 15-day notice has to be given before bringing such an issue before the Board. However, he was countered and told “we have legal opinion” over the decision. He was also told, “this was not a court hearing”.
The NDTV report also states that the decision to remove Mistry had been in making for long and was based on his “dismal performance as CEO”.
In a letter to employees on Monday, Ratan Tata wrote that “in the interest of the stability of and reassurance to the Tata Group,” he is returning as Chairman.
While the combined market valuation of all listed companies of Tata Group almost doubled during Mistry’s four-year tenure, the growth was nearly 57-times under his predecessor Ratan Tata.
Tata Group is the country’s most valuable group and has an estimated 4.1 million shareholders across its various listed companies. Individually, TCS is the country’s most valuable company and has been the biggest contributor to the group’s valuation.
When Ratan Tata took over the charge way back in 1991, the total market cap of the group was less than Rs 8,000 crore and Tata Steel was most valued among its 18 listed companies at that time.
On Monday, the group in a brief statement said Ratan Tata has been appointed interim chairman of Tata Sons and the board has constituted a Selection Committee to choose a new Chairman. The committee comprises Ratan Tata, Venu Srinivasan, Amit Chandra, Ronen Sen and Lord Kumar Bhattacharyya and has been mandated to complete the selection process in four months.