Cyrus Mistry
Cyrus Mistry

How Cyrus Mistry Became Youngest Chairman Of Tata Sons

In 2006, Cyrus, 38 then, was appointed on board of Tata Sons after his father Pallonji Mistry retired. He was also a director on Tata Power and Tata Elxsi board

Cyrus Mistry was the sixth and the youngest at the age of 44 years to become the Chairman of Tata Sons when he took over in 2012 from Ratan Tata. Till his appointment as the chairman to lead Tata Sons, not many knew of Mistry, who was then associated only with his family business.

Mistry succeeded his father Pallonji, who was the single largest shareholder of Tata Sons with 18.5 per cent stake, on the board of Tata Sons. In 2006, Cyrus, 38 then, was appointed on board of Tata Sons after his father Pallonji Mistry retired. He was also a director on Tata Power and Tata Elxsi board.

During his tenure as Chairman of Tata Sons, he focussed on profitability and sustainability. He took many decisions to get rid of non-performing assets, including the sale of the UK assets of Tata Steel, and shutting down the soda ash and calcium chloride plant of Tata Chemicals at Winnington in the UK.

Before being picked to become the Chairman of Tata Sons, Mistry was the managing director of Shapoorji Pallonji Group. In 1991 he entered the family business, becoming director of its flagship construction company, Shapoorji Pallonji & Co. Ltd. His brother, Shapoor, directed the group's real-estate business, and their father continued as chairman of the board of directors.

He was appointed the managing director of the Shapoorji Pallonji Group in 1994. During his two decades at the helm of Shapoorji Pallonji & Co, the company continued its expansion beyond traditional construction to large engineering projects, including designing and building complex projects in marine, oil and gas, rail and power sector.

During his reign, Shapoorji Pallonji's construction business grew from a turnover of $20 million to almost $1.5 billion. The company also continued to grow overseas, undertaking more projects in the Middle East and Africa.

Under his leadership, the SP group also registered many firsts in India - construction of the tallest residential towers, the longest rail bridge, the largest dry dock and the largest affordable housing project.

According to reports, the then 44-year-old Mistry was reluctant to take up the job but some persuasion, including by Ratan Tata himself, led him to accept the offer.

To some watchers, this was an audacious move to appoint a relatively young person with established leadership credentials since joining the family business in 1991 to head a big corporation like the Tatas.

After four years at the helm, Mistry was replaced in a boardroom coup in October 2016, which saw Ratan Tata coming back to helm the group before the reigns were passed on to N Chandrasekhar.

The might of his father Pallonji Mistry who was called as the 'Phantom of Bombay House' for the influence he wielded at the Tata Group headquarters, did not come in handy to help Mistry, who had begun on a wide-ranging drive to improve governance practices at the group.

It turned bitter, with Mistry dragging the storied corporate grouping to courts to get the reasons for his exit. Mistry claimed his work was appreciated a few months before and wanted to know the reasons that led to the sudden removal from the chairman's post.

Since the exit, the Mistry family, which is the single-largest shareholder of Tata Sons with over 18 per cent holding, has often been at loggerheads and has also offered to offload its entire stake leading to speculations over the valuation.

During his time at the helm of Tata Group, Mistry depended on a specially created group executive council (GEC) consisting of handpicked executives from within Tata Group, industry executives and also academia to drive operations. He was termed as a studious backroom executive who had a sharp mind.

A reclusive and a conviction for the work to do the talking meant there was very little known about Mistry even during his time at the helm. He did not do a single media interview from Bombay House but opened up to speak in the days following his ouster. 

The battle for narratives mounted by Mistry in the days following the removal saw some sharp attacks, including statements like one man's ego  leading to bad business decisions at the group and also one which blamed Tata for not speaking the truth.

On the legal front, Mistry first went to the National Company Law Tribunal, which dismissed his petition challenging the manner in which he was ousted and ruled that the board and majority shareholders had lost confidence in him.

He, however, successfully appealed in the National Company Appellate Tribunal, but the Supreme Court sided with the Tatas who had gone in appeal.

The only reprieve he got from the apex court was to delete some adverse remarks made in the original judgement.

He was the second person from outside the Tata family to head the Tata group as Tata Sons Chairman. 

(With PTI inputs)

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