Appointed deputy chairman of Tata Sons, to take over after Ratan Tata retires in December next year.
Cyrus Pallonji Mistry" title="Cyrus Pallonji Mistry" class="" />The next occupant of the corner office at Bombay House, headquarters of the Tata Group, will not have a Tata surname. Cyrus Pallonji Mistry, 43, was on Wednesday appointed deputy chairman of Tata Sons, the group’s holding company, ending the suspense over India Inc’s most awaited corporate succession. Mistry will work with chairman Ratan N Tata over the next year and take over from him when Tata retires in December next year. This, a Tata Sons release said, is according to the unanimous recommendation of a selection committee. Mistry was originally part of the committee but recused himself after other members said he was a probable candidate.
It’s only the second time in its 143-year history that the group will have a non-Tata at the helm of affairs. The only person outside the Tata family to become chairman of the group was Nowroji Saklatwala from 1932-1938. He was succeeded by J R D Tata.
|THE EMPIRE AND THE SUCCESSOR
|* 31 publicly listed Tata enterprises have a combined market cap of $77.44 billion (as on November 17, 2011)
|* Cyrus Mistry is the younger son of Pallonji Mistry, whose family is the largest individual shareholder in Tata Sons
|* Cyrus is managing director of the Shapoorji Pallonji Group
|* He is a civil engineer from Imperial College, London, and an MSc in management from London Business School and was inducted into the Tata Sons board in August 2006
Mistry may not have a Tata surname, but he is the youngest son of Pallonji Mistry, whose family is the largest individual shareholder in Tata Sons, with 18 per cent stake.
Mistry, a graduate of civil engineering from Imperial College, London, and a Master of Science in Management from the London Business School, is currently managing director of Shapoorji Pallonji Group, which has interests in construction, real estate, infrastructure and textiles. But, it is a tiny fraction of the size of the Tata empire. He is also part of the board at Afcons Infrastructure and United Motors (India).
Tata was effusive in his praise of Mistry. Terming it as “a good and far-sighted choice,” Tata said Mistry has been on the board of Tata Sons since August 2006 (when Mistry was just 38) and he had been impressed with “the quality and calibre of his participation, his astute observations and his humility”.
Tata said Mistry was intelligent and qualified to take on the responsibility being offered. He would be committed to working with Mistry over the next year to give him the exposure, the involvement and the operating experience to equip him to undertake the full responsibility of the group on his own retirement.
In his statement, Mistry said he would legally dissociate himself from the management of his family businesses to avoid any issue of conflict of interest, in keeping with the values and ethics of the Tata Group. He said he felt deeply honoured by this appointment.
“I am aware that an enormous responsibility, with a great legacy, has been entrusted to me. I look forward to Mr Tata’s guidance in the year ahead in meeting the expectations of the group,” he added.
The appointment came as a surprise as speculation had earlier ranged from Tata’s half-brother Noel Tata to outsiders like Indra Nooyi, Arun Sarin, Anshu Jain, etc.
Though some said Mistry was chosen more for the family’s large stake in Tata Sons, people who know Mistry well said he was the perfect choice for the job. "I think Tata and Mistry have many things in common, especially their nature and how they interact with people. Both are shy, prefer to be low-key and very focused," said a person who has known Mistry from his early days.
Sugail Sheth, a close observer of the group, said it was a triumph of competence and continuity and youth. “He has worked with the Tata Sons board and all its directors and surely would have a long innings ahead. Also, I am glad it is a Parsi who is at the helm of affairs, as no one understands philantrophy like them," Sheth said.
But, Mistry obviously has a tough act to follow. When Ratan Tata took over from his uncle, J R D Tata, in 1991, the group was an unwieldy sprawl of 300 companies. Tata sold a number of unprofitable businesses and kicked the rest into shape.
The Tata Group comprises over 100 operating companies in seven business sectors. The group has operations in more than 80 countries across six continents and the total revenue of Tata companies was $83.3 billion (around Ra 379,675 crore) in 2010-11, with 58 per cent of this coming from business outside India. Tata companies employ over 425,000 people worldwide.
There are 31 publicly listed Tata enterprises with a combined market capitalisation of about $77.44 billion (as on November 17, 2011), and a shareholder base of 4.3 million.