Tata Group abruptly ousted its chairman of almost four years. India’s biggest conglomerate, casting the specter of a leadership vacuum at the $100 billion coffee-to-steel business empire.
Chairman Cyrus Mistry, 48, was replaced by his 78-year-old predecessor at a board meeting on Monday, the group’s holding company said in a statement. Ratan Tata, a scion of the founding family, will serve as the interim chief and take part in the search for a more permanent successor, according to the statement from Tata Sons Ltd.
Of the nine Tata Sons board members, six voted to oust Mistry, two abstained, while Mistry opposed the decision, according to people with knowledge of the matter, who asked not be identified because the information was private.
Mistry was unwinding some of the expansion. Tata Steel Ltd. said in March that it would consider selling its U.K. operations after years of losses. Tata Power Ltd., which posted a full-year profit in March 2015 after three years of losses, plans to sell its stakes in Indonesian coal mines. Tata Communications Ltd. and Indian Hotels Co. are among other units looking to offload overseas assets to help pare debt.
Tata Sons is also fighting a legal battle with NTT Docomo Inc., its estranged partner in an Indian telecom venture. Docomo is seeking to enforce a London Court of International Arbitration order, asking Tata Sons to pay $1.17 billion for failing to uphold a contract.
The board made the leadership change after getting a recommendation from Tata Sons’ principal shareholder, which is Tata Trusts, according to a trust spokesman. Mistry will continue to be a director at individual group units, he said. Ratan Tata is chairman of the two main trusts, according to Tata Sons website.
Tata Sons created a panel comprising of Ratan Tata, Venu Srinivasan, Amit Chandra, Ronen Sen and Kumar Bhattacharyya to find a new chairman within four months, according to the statement.
[Referenced from bloomberg.com]