Has Tata Group already found a replacement for Cyrus Mistry?
The Tata Sons move to mandate a selection panel to find a new chairman for the group in the relatively short period of four months, has led to speculation that the $108 billion, Mumbai-based conglomerate may have already decided on the next chairman.Cyrus Mistry Exit Updated: Oct 25, 2016 20:47 IST
The Tata Sons move to mandate a selection panel to find a new chairman for the group in the relatively short period of four months, has led to speculation that the $103 billion, Mumbai-based conglomerate may have already decided on the next chairman.
In 2010, in its move to find a successor for then chairman Ratan Tata, who was scheduled to retire in 2012, Tata Sons had formed a selection committee to hunt for the possible successor.
It took the group more than two years to come up with a list that reportedly included Ratan Tata’s half-brother Noel Tata and Pepsico chair Indra Nooyi, before Tata Sons, in a surprise announcement named, Cyrus Mistry. Tata Sons did not comment then on whether Noel Tata and Nooyi were in the race.
“If it took them more than two years to hunt, then going by precedence, the announcement of a short period of four months, by when Tata Sons says a new chairman would be announced, shows that the group probably already has someone in mind,” said a person who has in the past collaborated on strategy decisions.
Speculation is rife in Bombay House that the future head would be an insider, probably from the Tata family or a Ratan Tata loyalist.
The rush for the new person to take charge before the start of the new fiscal year is also to enable group companies to decide on crucial decisions including on possible sale or divestitures, said group sources.
They also pointed out that Tata Trusts, which is the principal shareholder of Tata Sons, and is chaired by the interim chairman Ratan Tata, has three nominees in the selection panel formed to find a new chairman. “This composition of the selection panel, in favour of Tata Trusts, would give the Trusts’ vote more strength in deciding the new chairman,” said the person cited earlier.
On Oct 24, Tata Sons said the board has formed a selection committee tasked to finding the new chairman. The committee has five members of which Tata Trusts nominees include Ratan Tata, industrialist Venu Srinivasan and former managing director of Bain Capital Amit Chandra. Tata Sons nominee is former India ambassador to the US, Ronen Sen, while there is one external candidate, Lord Kumar Bhattacharya.
Tata Sons did not comment on a mailed query sent by HT on the short tenure for the selection panel.
While the abrupt move to replace Cyrus Mistry had caught everyone by surprise, certain incremental developments in the months preceding are now being cited for the Oct 24 change. In September, there was talk in Bombay House, the headquarters of the Tata Group, about possible major changes in the leadership team. There were also reports of previous team members being asked on whether they would be open to come back to the group.
First Published: Oct 25, 2016 11:29 IST