Mistry’s ouster not the first at Tata Group, but stakes are higher this time
In the past, ousters from the group happened as Ratan Tata fought the so-called satraps who ran group companies as their fiefs, but none resulted in a courtroom drama.Cyrus Mistry Exit Updated: Oct 26, 2016 21:00 IST
Cyrus Mistry’s ouster is not a one-off case at Bombay House, and Ratan Tata is not new to boardroom battles.
This time though, things may be different since the stakes are higher – it is about the control of the $116-billion Tata group, a lot of which was transforming under Mistry into a different entity from what Tata had left it in 2012, when he handed over power to the youngest son of Pallonji Mistry.
In the past, ousters from the group happened as Ratan Tata fought the so-called satraps who ran group companies as their fiefs, but none resulted in a courtroom drama.
Rustomji Homusji ‘Russi’ Mody
One such battle was with Rustomji Homusji ‘Russi’ Mody, whose legends still do the rounds at Tata Steel, even after his death. Mody’s management style brought him at loggerheads with Tata, and when Mody tried to rope in his adopted son Aditya Kashyap as the joint managing director, it added fuel to the fire . The father-son duo was finally forced to resign in 1993.
In 1994, Darbari Seth who ran Tata Chemicals, stepped downs as Ratan Tata exercised his control. In December 1997, Nani Palkhivala, Darbari Seth, SA. Sabavala, KM. Chinnappa, SR. Vakil, AH Tobaccowala and FC Kohli stepped down from the Tata Board at one go. The company had said in a statement at that time that the move was to make room for younger talent, but grapevine has it that the exits were under pressure, as Tata wanted to change the way the companies were managed.
In 1997, Ajit Kerkar was ousted from Indian Hotels, as Ratan Tata back then said that “he was not fulfilling his responsibilities” and took control as the company’s chairman. “After stepping down as the chairman and managing director, Kerkar would no longer be the non-executive director of the company as would have been the normal case,” Tata had said.
He, however, made up with most ousted members later. He acknowledged Kerkar’s contribution to Indian Hotels, and after Mody’s death, referred to the latter as “an institution at Tata Steel.”
First Published: Oct 26, 2016 09:22 IST