NEW DELHI: It came as a big shock, when on monday it was announced that Cyrus Mistry has been removed as the chairman of the Tata group, and his predecessor Ratan Tata is back at the helm. Cyrus Mistry will however, continue as the director of the group. Here is the list of some CEO’s of top companies across the globe who were sacked suddenly or resigned themselves.
Ratan Tata took over the control of the Tata Group after Cyrus Mistry was abruptly removed as chairman of the $100 billion business empire. Some say that the ouster had to do with performance problems. It is assumed that Tata Sons was unhappy with Mistry’s approach of shedding non-profit businesses, including the conglomerate’s steel business in Europe, and concentrating only on cash cows.
The Tatas are present in about 100 businesses ranging from automobiles to retail to power plants to software. But just two of them have been consistent performers — IT services exporter Tata Consultancy Services (TCS) and Jaguar Land Rover, the marque car company it bought from Ford Motor in 2008.
The decision was taken collectively by the board of Tata Sons in the long-term interest of the company and on the recommendation for the principal shareholder of Tata Sons that is Tata Trusts, according to reports. Mistry will remain a director of the individual companies, they added.
A selection panel has been formed to find a successor in four months. The committee will include Ratan Tata, Ronen Sen, Venu Srinivasan, Amit Chandra. Sir Dorabji Tata Trust and Sir Ratan Tata Trust — two trusts chaired by Ratan Tata — have powers to appoint or remove a chairman with their own three-member quorum of the selection panel. The 2 trusts hold 66% stake in Tata Sons, the holding firm of the $100-billion Tata group of companies. Mistry’s family, the Shapoorji and Pallonji Group, owns 18.5% stake in Tata Sons and is the largest shareholder in the company. Shapoorji and Pallonji Group, the majority shareholder in the Tata Group, has termed Cyrus Mistry’s ouster from Tata Sons as illegal. Mistry is the son of Pallonji Mistry, who heads the group. The group says it will contest the move, adding that the decision to remove Mistry was not unanimous. Out of the nine board members, 8 members voted. Six voted for Mistry’s ouster and two abstained. Tata group stocks are in for short-term volatility, when trading resumes on Tuesday. “It is a shocker, because Cyrus had a different way of handling things. He was consolidating the Tata businesses by selling non-crore businesses of the Tata group. He was concentrating on selling low-margin businesses and concentrating on high-margin businesses. Tatas are good as humans, but in business cycle, they are bit lavish,” said AK Prabhakar, who heads IDBI Capital. “They closed their low-margin broking arm. How the market may react, one cannot say. But we may see some knee-jerk reaction. There will be few stocks which will react negatively,” Prabhakar said.