He was very protective of his “man in the background” reputation, refusing to give even a single interview during his time as chairman of Tata Sons.
In 2012, Cyrus Mistry was part of a five-person selection team that spent 15 months in the corner office of Bombay House, the Tata headquarters in Mumbai, looking for a successor to Ratan Tata. As it turned out, the selection committee ultimately decided that the “guy sitting with them” was the best candidate for the position, making the entire succession process pointless.
For the ordinarily low-key Cyrus Mistry, that was his first taste of the limelight, which he had avoided up until that point. He was very protective of his “man in the background” reputation, refusing to give even a single interview during his time as chairman of Tata Sons. On October 24, 2016, after serving as chairman for only about four years, he was removed from office with little fanfare.
Mistry claims that the value of the Tata Group’s brand increased by $5 billion during his tenure as CEO, thanks to a 100 per cent increase in patent filings and other factors. For these and other reasons, Mistry’s dismissal surprised those in the business world.
Corporate observers speculate that Mistry’s dismissal resulted from Ratan Tata’s opposition to the business restructuring Mistry was attempting to implement within certain group companies and Mistry’s inability to resolve the resulting disagreements. After his dismissal, Mistry discussed the legacy issues and his differences with Ratan Tata. Mistry wanted out of Mistry’s pet projects like Tata Steel’s European venture, the Nano car, and telecom services.
This was made abundantly clear when, in 2017, Mistry released a statement about the failure of the Nano project. He explained that almost a year ago, despite a company-wide decision to end production of the loss-making Nano, the show was still going on on a small scale. In addition, he claimed that the company and Tata Motor Finance suffered a massive NPA loss of Rs 4,000 crore due to “the practise of lending without adequate risk assessment,”, especially in the Nano and small commercial vehicle (SCV) segment.
Tata’s acquisition of Corus, based in London, for over $12 billion in 2007 was seen as “one man’s ego” by Mistry and went against the wishes of some board members and senior executives. He said it could be had for considerably less than the asking price. Later in 2016, despite being fired before the sale of Corus could be finalised, Mistry decided to wind down operations and sell it off for a token amount.
Mistry sought to replace shadow directors with actual board members and institute corporate governance within the organisation. C. Aryama Sundaram, senior counsel who represented Cyrus Mistry in the Mistry-Tata legal tussle, said, “His fight was for corporate governance and rights of minority shareholders.”
The relationship between Ratan Tata and C. Sivasankaran, the promoter of Sterling Infotech, is said to have made Mistry uneasy. The Tata Group, for its part, denied all the accusations made by Mistry. Since Mistry left Tata Sons, the company has stopped producing the Nano and pulled out of the telecommunications industry.
Mistry relied on a group executive council (GEC) comprised of handpicked executives from within the Tata Group, industry executives, and academia to steer operations during his tenure as chairman. It was said of him that he was an academic backroom executive with a keen mind.
Soon after, Tata Sons changed its status from public to private. Mistry’s family owns 18.4% of the company and would need Tata Group’s approval to sell their shares to anyone other than Tata Group. Their approval is also required to determine the stake’s value. Since Mistry and his relatives couldn’t sell their stake or get a seat on the board, they were powerless. When Ratan Tata announced Mistry’s election as Tata Group deputy chairman in 2011, he called the decision a “good and far-sighted choice.”