Cyrus Mistry was an introvert who never recovered from Tata battle

Cyrus Mistry, an introvert who shied away from publicity, was a straightforward, scrupulously honest businessman who never really recovered from the trauma of being thrust into the national limelight for daring to challenge the Tata behemoth.

Cyrus Mistry was an introvert who never recovered from Tata battle

In December 2012, when Cyrus Mistry took over the coveted position of chairperson of the mighty Tata group from the outgoing Ratan Tata, it seemed as if he was indeed fortune’s favourite. It proved to be a poisoned chalice. The Mistry family, which is recovering from the death of his father — billionaire construction magnate Pallonji Mistry — a few months earlier, has suffered a series of setbacks ever since Mistry was sacked as Tata Sons chairperson in 2016. Cyrus Mistry, an introvert who shied away from publicity, was a straightforward, scrupulously honest businessman who never really recovered from the trauma of being thrust into the national limelight for daring to challenge the Tata behemoth. The long, expensive litigation he launched against the Tatas in a bid to avenge his honour left him badly bruised and took a heavy toll on the Mistry family fortunes.

The oscillating legal battle between Cyrus and the Tatas stretched over many years. Though the National Company Law Appellate Tribunal upheld Mistry’s charges, the Supreme Court last year took a diametrically opposite view and ruled decisively in favour of the Tatas. The court held that a private company is not subject to the norms of good governance for public and listed companies. Though shocked by the verdict, Mistry commented sportingly, “We will take the knocks on our chins. My conscience is clear. My aim at Tata was to ensure a robust brand driven system of decision making and governance that is larger than any single individual.”

The last few years have not been kind to the Mistry family. It suffered heavy financial losses amid Covid-19 since its assets are mainly tied up in construction and real estate apartments from its sizable shareholding in Tata Sons. The family also lost the huge revenues it traditionally enjoyed through its long association with the Tata group. Most tantalising for the Mistrys is the fact that they are unable to monetise their 18.37 per cent shares in Tata Sons without the consent of the Tata Sons board. This is because of the new articles of association that were put into effect just before Ratan Tata relinquished charge in December 2012. The articles of association ensured that the Tata charitable trusts tightened their grip over Tata Sons, the holding company which manages India’s top corporate house with an annual turnover of far more than $100 billion. (Two years back while the Shapoorji Pallonji group pegged the value of their Tata shares at Rs 1.76 trillion, the Tatas valued it at Rs 80,000 crore and refused to even give the Mistrys the right to pledge their shares for raising money in view of their mounting debts.)

Also Read: Friends to foes – how Cyrus Mistry & Ratan Tata shared so much in common & yet fell apart

A qualified civil engineer with a degree from Imperial College, London, and an MBA from the London Business School, Cyrus, along with his brother Shapoor, had helped modernise and diversify the family’s core business and proved extremely successful at the job. When his father stepped down as a director of the Tata Sons board in 2005, it was he rather than his more flamboyant older brother who was chosen by Ratan Tata to become the family nominee on the board. Eventually, when Ratan Tata retired as chairperson at 75, Cyrus was chosen to step into his shoes since the selection committee could not find a suitable candidate. Unfortunately, once Cyrus took over the chairmanship of the group, the relationship between him and Ratan Tata slowly deteriorated.

On October 24, 2016, Cyrus was unceremoniously removed as chairman without notice. The reason for the differences between the two men was never completely clear. Mistry believed he was trying to fix things, Tata perhaps feared he was attempting to undo his legacy. Both Ratan and Cyrus were members of the small minority Parsi community, but they came from rather different backgrounds. The Tatas, as one Parsi businessman put it to me, considered themselves aristocratic and noble and the Mistrys mere real estate people. Cyrus’s grandfather, the legendary builder Shapoorji Pallonji, and father, Pallonji Mistry, were hard-nosed businessmen in the rough and tumble of the construction world. The plump, bespectacled and earnest Cyrus grew up in a different era and environment. He earned a reputation for sincerity and straightforwardness. A team player, he deliberately kept a low profile as Tata chairperson and believed the CEOs of the respective companies should be projected instead of him. 

Business journalist Sucheta Dalal described him to me as “incapable of guile and very genuine. What he says is generally backed by documents”. Business executive Mukund Rajan, who has worked closely with both Ratan Tata and Cyrus Mistry in his book Brand Custodian, described Mistry as follows: “One of the smartest people I have ever met… a great leader who was not insecure and voluntarily surrounded himself with people with great talent, skills and strong opinions, unlike many other leaders I have seen.”

Mistry once corrected me when I termed his famed confrontation with Ratan Tata as a corporate battle. In a conversation, he remarked, “I was removed in an inappropriate manner. I can lick my wounds and put that behind us. That phase is over. But we have to do whatever is necessary to protect our 18.37 per cent of Tata sons.” The reason he had persisted in his David versus Goliath fight was to ensure that the values of the Tata group’s founders were respected. “This is about governance… it’s not about me, it’s not about position.” The messy legal battle was also a fight for his reputation. He wanted to tell the world that he was doing the right thing. He was following all the rules and doing what he thought was best for the company. He was deeply hurt by the Tata executives’ insinuations that he was removed for incompetence. The facts suggest otherwise. During Cyrus’s three-and-a-half-year tenure as chairperson, Tata shares fared better than the average on the Bombay Stock Exchange. Mistry could also feel vindicated by the fact that his successor, N Chandrasekaran, would go on to implement most of the measures Mistry had already conceived in his recovery plan for the group, including unburdening the loss-making Tata telecom business and closing down Nano production.

After his exit from Tata Sons, Cyrus did not take back management control at Shapoorji Pallonji and Co. He instead carved out something for himself. Cyrus floated a venture capital fund, Mistry Ventures, to back startups. In 2022, the Shapoorji Pallonji Group cleared a major portion of its outstanding debts by selling its stake in companies such as Eureka Forbes and Sterling and Wilson Renewable Energy. After the pandemic and subsequent lockdowns, its real estate division finally started picking up by 2022. As in the tradition of most Parsi business families, the Mistrys too were notable philanthropists. In 2018, Shapoor and Cyrus set up the Institute for Zoroastrian studies in memory of their grandfather at the School of Oriental and African Studies, London. Cyrus Mistry is survived by his wife Rohiqa, the daughter of leading lawyer Iqbal Chagla, and sons Firoz and Zahan.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.