In a dramatic development that took the corporates and others by surprise, Cyrus Mistry was sacked as chairman of Tata Sons. He was replaced by Ratan Tata, who will be the interim chairman for four months.

The announcement came after the board of Tata Sons met here and decided to replace 48-year-old Mistry, who had taken over from Ratan Tata in 2011. The board named a five-member search committee, which includes Tata, to choose a successor to Mistry within four months.

Mistry was chosen as Tata’s successor in November 2011 and was appointed Deputy Chairman of Tata Sons, whose board he had entered in 2006. He was made chairman on the basis of his representation from Shapoorji Palonji, the largest shareholder in Tata Sons.

There were no reasons given for the change of leadership of the man who was brought in with much fanfare but it is believed 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.

Tata Sons are the main holding company of the group.

CEOs at the operating company level of the group have not been touched in the rejig, company sources said. The board constituted a selection committee comprising Tata, TVS Group head Venu Srinivasan, Amit Chandra of Bain Capital, former diplomat Ronen Sen and Lord Kumar Bhattacharya. All of them, except Bhattacharya, is on the board of Tata Sons.

Mistry, who was chosen by a five-member panel in 2011 to succeed Ratan Tata, took over the reins of the conglomerate when the veteran industrialist retired on December 29, 2012, when he turned 75. After taking charge, he had to face some challenging situations such as the decision to sell Tata Steel UK in the wake of mounting losses.

The Tata group is also engaged in a legal battle with Japan’s Docomo over the split of their telecom joint venture Tata Docomo.
During Ratan Tata’s tenure, the group’s revenues grew manifold, totaling $100.09 billion (around Rs 475,721 crore) in 2011-12 from a turnover of a mere Rs 10,000 crore in 1991.