- Ratan Tata back as chair of Tata Sons, Cyrus Mistry removed
- Selection committee to identify new chairman
- New chairman to be selected within four months
"Tata Sons today announced that its board has replaced Mr. Cyrus P. Mistry as Chairman of Tata Sons. The decision was taken at a board meeting held here today," said Tata Sons, the holding company of the sprawling tea-to-steel Tata Group, which spans more than 100 companies in as many countries.
The company said industrialist Ratan Tata, 78, had been appointed interim chairman until a successor was appointed. A panel that includes Ratan Tata has been given four months to find a new chairman, the company said.
(Read: Ratan Tata back in charge of India's biggest conglomerate: foreign media)
“The board in collective wisdom and on recommendations of principle shareholders took a decision to change for long-term of interests of Tata Sons and Tata Group,” a Tata Sons spokesperson said.
CEOs at the operating company level will not be affected by the changes, news agency Press Trust of India reported, citing sources.
Ratan Tata has written to the employees of India's largest conglomerate, informing them that "in the interest of the stability of and reassurance to the Tata Group," he is returning as Chairman.
(Read: Back In Interest Of Stability: Read Ratan Tata Letter To Employees)
The Tata Group includes one of India's largest IT firms, Tata Consultancy Services, the big vehicle maker, Tata Motors, and a ritzy hotel chain including Mumbai's Taj Mahal Palace hotel.
But the conglomerate's total revenues had dropped 4.62 per cent to $103 billion in fiscal year 2015-16, from $108 billion in the previous financial year. And it is currently trying to sell its loss-making British steel assets. (Read more)
Mr Mistry had attributed the fall in revenue to global political uncertainties, a steep reduction in commodity prices and volatility in currencies. International revenues at around $70 billion constituted 69 per cent of the group's revenues.
Cyrus Mistry, 48, succeeded Ratan Tata in December 2012 after being announced as its heir more than a year earlier.
A string of deals since the turn of the millennium saw the group snap up a clutch of famous names including Tetley Tea, luxury car maker Jaguar Land Rover and steelmaker Corus.
The Tata brands factor daily in the lives of Indians, with products ranging from salt to trucks to watches.
The group founded under British colonial rule in 1868 has hit headwinds of late however, with lacklustre performances at several companies including Tata Motors, Tata Power and Tata Steel.
Ratan Tata, who took over as chairman of Tata Sons in 1991, is credited with building it into a global behemoth.
Cyrus Mistry was managing director of the Shapoorji Pallonji Group, before taking over as the chairman of Tata Sons. He is an engineer from the Imperial College in London and began working for the group controlled by his father, billionaire Shapoorji Pallonji Mistry, in 1991.
Shapoorji Mistry is the single biggest shareholder in Tata Sons. About 66 per cent of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family.