 "10 things to know about Tata Sons replacing Cyrus Mistry")
In a sudden move, Tata trusts on Monday replaced Cyrus Mistry as the chairman of Tata Sons. Chairman Emeritus Ratan Tata was recalled as the interim chairman and a selection committee was set up to get on board a new chairman within four months.
Here are 10 things we know about the unforeseen move:1. Search committee
A five-person search committee has been appointed to select the new chairman of the group. The committee will have to be make its selection by February 2017.
2. Members of the selection panel
The search committee consists of Ratan Tata, Venu Srinivasan, Amit Chandra, Ronen Sen and Sushanta Kumar Bhattacharyya. All of them will be looking at options both inside the group and outside it to select the next group chairman of Tata Sons.
3. Interim chairman
Ratan Tata will take over as the interim chairman of the group, even as the search committee finalises a new group chairman.
4. ‘Bright & selfless’
Sushant Bhattacharaya, a member of the House of Lords in the UK, was also part of the search committee that selected Cyrus Mistry as the group chairman in 2012. According to reports Bhattacharya had then described Mistry as “bright and selfless”. Ronen Sen, former ambassador of India to the U.S, was appointed as a director in 2015.
5. Difficult times amid proposed Brexit
Tata Sons as a group has been going through tough times. Tata Steel posted a net loss of over Rs 3000 crore in the first quarter of 2016. With Britain exiting the European Union, Tata Steel’s European operations are also under stress. Tata Steel Europe is also a loss-making enterprise and could be further negatively affected by Brexit
6. The Docomo angle
Tata Teleservices also suffered a blow with the exit of Japanese Telecom major Docomo from its joint venture with the company. Docomo has entered into arbitration with Tata Sons in the UK, claiming almost $1.2 billion and requesting for attaching of Tata properties if the amount is not paid.
7. Launch promises not met
After taking over, Mistry had reportedly promised two new launches for Tata Motors every year. However, Tata Motors’ new launches like the Zica (later renamed Tiago) and Bolt have failed to make a mark in the domestic market. Fears have also mounted at its UK facilities, which produce the Jaguar and Land Rover brands, over job losses following Britain’s exit from the EU.
8. Differential focus
Media reports suggest that Ratan Tata was unhappy with Mistry for concentrating his business strategies only on growing the group’s strong businesses like Tata Consultancy Services (TCS), while ignoring the struggling businesses.
9. Cocooned in the comfort zone
It is reported that the Tata Group as a whole hasn’t gone beyond its comfort zone under Mistry. While TCS has done well, the downturn in sectors like commodities and chemicals has hit the group’s domestic and international operations. The management reportedly believed that Mistry as the group’s head couldn’t steer the company through tough times for their business globally.
10. Piramal, Khambata not on search panel
The committee to find a new chairman doesn’t include six of the nine Tata group directors. Those not on the search committee include Ajay Piramal and Farida Khambhata.