Tata Group reportedly sought legal opinion before deciding to replace Cyrus Mistry as the chairman. Various media reports suggest that Tata Group sought the legal advise of luminaries like Mohan Parasaran, Justice Raveendran and P Chidambaram before taking the decision.
However, according to CNBC-TV 18, the Shapoorji Pallonji Group has called the move illegal, stating that a 15-day notice was required before replacing Mistry. According to ET Now, the decision to replace Mistry was well-thought out and not an overnight move.
In one of the biggest upheavals in the corporate sector, the Tata Sons Board has appointed Ratan Tata as the interim chairman of the group, replacing Cyrus Mistry. The decision was taken at a Board meeting today.
Mistry has resigned from his post as chairman. The Board has constituted a Selection Committee to choose a new Chairman. The Committee comprises Ratan N. Tata, Venu Srinivasan, Amit Chandra, Ronen Sen and Lord Kumar Bhattacharyya, as per the criteria in the Articles of Association of Tata Sons. The committee has been mandated to complete the selection process in four months.
If CNBC-TV sources are to be believed, the decision to replace Cyrus Mistry was ‘performance-based’. The channel said that Tata Sons decided to remove Cyrus Mistry as the chairman in the “larger interest of the group”.
Another report suggests that over the last 6 months, there had been serious differences between Mistry and Ratan Tata. Cyrus Mistry had in December 2012 become the sixth chairman of the Tata Group, replacing Ratan Tata.
Mistry had been the director of the company since 2006. Mistry was earlier managing director of the Shapoorji Pallonji Group.
Ratan Tata had been chairman from 1991 till his retirement on December 28, 2012. During his tenure, the group’s revenues grew manifold, totalling over $100 billion in 2011-12.