Decision surprised all and sundry

THE SHAPOORJI PALLONJI FAMILY IS THE LARGEST SHAREHOLDER IN TATA SONS, OWNING 18.5% OF THE EQUITY. TATA TRUSTS, WHICH IS CHAIRED BY RATAN TATA, IS THE PRINCIPAL SHAREHOLDER

MUMBAI: The abrupt replacement of Tata Sons chairman Cyrus Mistry, on the recommendation of the principal shareholder, Tata Trusts, has fueled speculation on whether there were differences of views between the two large shareholders.

The Shapoorji Pallonji family is the largest shareholder in Tata Sons, owning 18.5% of the equity.

Tata Trusts, which is chaired by Ratan Tata, is the principal shareholder.

Incidentally, Ratan has been appointed interim chairman, coming back to the post that he exited four years ago. The board has also formed a selection committee tasked to finding a chairman for the Tata Group. Mistry’s tenure of four years is the shortest, with the mode of his replacement also widely described as unprecedented. But a Tata Trusts spokesperson tried to play down the announcement. “It is a forward looking move and was decided in the long term interests of Tata Sons and the Tata Group.”

The development took Indian industry by surprise with even senior management within the group claiming no knowledge. However, over the past few months, there was a buzz about major changes in the leadership team, which indicated the Tata Group could likely change some of the heads of group companies due to the poor financial performance.

On Monday, however, the Tata Sons spokesperson categorically ruled out any change at the level of CEOS in the group companies.