A day after Cyrus Mistry's dramatic removal as chairman of Tata Sons, Ratan Tata clarified tthat as interim chairman his role was only to provide "stability and continuity of the Tata Group" and that a "permanent leadership" would soon be in place. The names of Pepsi's Indra Nooyi, former Vodafone CEO Arun Sarain and Noel Tata of Tata International are doing the rounds as Mistry's possible successors.
Dr Ralf Speth, CEO of Jaguar Land Rover, and Mr N Chandrasekaran, CEO Tata Consultancy Services, were appointed as additional directors on the Tata Sons Board today, news agency ANI reported.
Ratan Tata asked senior management of the conglomerate’s firms to focus on their businesses without being concerned about the change at the top level, news agency PTI reported.
“I assumed the role of the interim Chairman for stability and continuity so that there is no vacuum. This will be for a short time. A new permanent leadership will be in place. I look forward to working with you as we have worked together in the past. An institution must exceed the people who lead it," the interim chairman said while addressing managing directors and senior leaders of Tata companies at the Bombay House.
Ratan Tata ran the USD 100 billion group, known for long-serving chairmen, for 21 years before making way for Mistry in 2012.
What led to Cyrus Mistry's ouster: The inside story
Sources view Mistry's ouster as more of a corporate governance issue and a mismatch between the core value systems of Tata and Mistry.
The discontent between Tata Sons and Cyrus Mistry reportedly first gained ground with the addition of Ajay Piramal and Venu Srinivasan on the board of Tata Sons a few months ago. Sources have revealed that Mistry was not consulted on this move.
The decisions he was taking concerning companies of the Tata Group led to his ouster, industry stalwarts have revealed. These included his inclination to sell the steel business in UK, sale of the Taj Boston Hotel and exit of Tata Chemicals from the urea business. Tata Power's acquisition of Welspun Renewables' solar project and the messy breakup with DoCoMo that happened under his stewardship without the approval of key shareholders of the Tata Group or the Tata Trust are also believed to have played a role.
No caveat against Tatas: Cyrus Mistry
Mistry's office, meanwhile, has dismissed reports that he had also filed a caveat againt the Tatas.
"A caveat is a notice filed by a party fearing legal action seeking notice before action. Tatas have filed caveats seeking notice from Cyrus Mistry fearing legal action. Cyrus has not filed any caveats. He has already made a statement that such concerns are misplaced at this stage.”
The Tatas have reportedly filed caveat in the Bombay High Court and the National Company Law Tribunal to prevent Cyrus Mistry from getting an ex-parte order against his sacking
A caveat usually ensures that the court does not issue any order without allowing the other side to appear.
While Mistry's family's Shapoorji Pallonji Group has said in a statement that they will not move court to challenge the dismissal, sources reveal otherwise. Senior advocates Janak Dwarkadas and Iqbal Chagla will move court to protect the 18.5% stake that Mistry's father, Shapoorji Pallonji, holds in Tata Sons.
While stocks of Tata dropped slightly today, analysts predict market stability in the future.