By- Devansh Pandey
Ratan Tata took 2 years to find a competent replacement for himself. He brought in Cyrus Mistry as the new Chairman of the Tata Group of Companies. The one piece of advice given by Ratan Tata to Cyrus Mistry was “Be your own man”.
Was that possible?
source- Forbes India
With Ratan Tata continuously interfering in every decision of Cyrus Mistry, it was hard for both the company as well as Cyrus to run the company for its best. Ratan Tata did not like the decisions taken by Mistry such as Tata Power acquiring another company without the approval of the Tata Sons Board of Directors, not Backing some of the primary projects started by Ratan Tata like Production Of Tata Nano Car, then also some decisions related to British Steel. Cyrus was also not in favour of Tata alone bearing the loss of $1.2 Billion of NTT Docomo, the Japanese Telecom Giant who came into an alliance with Tata to form Tata
Docomo and failed in the Indian Market.
According to a report, Ratan Tata sent 550 emails trying to divert decisions taken by Cyrus Mistry. Even after being the Chairman of Tata Sons, he had no power to take decisions. The result was seen very soon. Cyrus saw what no other Chairman of any company had ever seen. He was ousted from the post of Chairman and this move was supported by 6 directors including Ratan Tata himself. source- businesstoday.in
It was a historic moment to see a chairman being forced to walk out from such a big company like this. As mentioned earlier The Mistry family had been friend with The Tata Family for decades. Shapoorji Pallonji had got these shares from the Tata Brothers themselves. This made them the largest Individual shareholder and what had been done to them was not right.
source- bloomberg.com
Mistry challenged the decision in the National Company Law Appellate Tribunal, but their decision was put on hold by the Supreme Court of India. However, after so many years Mistry has decided to end their year-long relationship with the Tata Sons Group of Companies and sell their stake of 18.4% for the value of Rs 1.34 Lakh Crores.
Tata did not want Mistry selling such a large chunk of shares in the market as it would lead to fall in share prices of Tata Group.
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