Tata Group Dumps Chairman, Launches Search for Successor
10/24/2016 - In a surprise move, Indian conglomerate Tata Group ousted its chairman on Monday and named a member of Tata's founding family to temporarily succeed him.
Tata didn't say why it had decided to replace Cyrus Mistry, 48, but The Wall Street Journal reported that the company said it was acting in its "long-term interest."
Ratan Tata, who had stepped down as chairman in 2012, will take on those duties for the next four months as selection committee undertakes a search. The abrupt decision shocked analysts and investors.
“This is just too bizarre that the chairman of the biggest industrial group in the country has been removed in such an arbitrary manner,” Gaurang Shah, vice president at Geojit BNP Paribas Financial Services Ltd. in Mumbai, told the Bloomberg news service.
“The Tata Group owes an explanation as to why such a sudden decision has been taken. There will be some knee-jerk reaction on the stock prices of Tata Group companies.”
Mistry's ouster comes amid talks between Tata Steel and Germany's thyssenkrupp over a potential merger of their European steel businesses. Tata has also has been discussing potential changes to its U.K. pension plan.
"Mistry has been at the heart of these negotiations," The Guardian newspaper reported.
The newspaper also said Mistry was pushed out on account of a "lack of performance" across the company, which counts Jaguar, Tetley tea and Eight O'Clock coffee among its brands.
Ratan Tata, who had stepped down as chairman in 2012, will take on those duties for the next four months as selection committee undertakes a search. The abrupt decision shocked analysts and investors.
“This is just too bizarre that the chairman of the biggest industrial group in the country has been removed in such an arbitrary manner,” Gaurang Shah, vice president at Geojit BNP Paribas Financial Services Ltd. in Mumbai, told the Bloomberg news service.
“The Tata Group owes an explanation as to why such a sudden decision has been taken. There will be some knee-jerk reaction on the stock prices of Tata Group companies.”
Mistry's ouster comes amid talks between Tata Steel and Germany's thyssenkrupp over a potential merger of their European steel businesses. Tata has also has been discussing potential changes to its U.K. pension plan.
"Mistry has been at the heart of these negotiations," The Guardian newspaper reported.
The newspaper also said Mistry was pushed out on account of a "lack of performance" across the company, which counts Jaguar, Tetley tea and Eight O'Clock coffee among its brands.
