- Mistry's ouster has been building for months now and yesterday's events were simply the Coup de grâce.
- Ratan Tata, if rumours are to be believed, simply did not like how Mistry conducted his business.
The coup against Cryus Mistry at Tata Sons is perhaps not surprising to those who have watched Ratan Tata from the early 90s, when he enacted a similar plot against Russi Mody, who was then seen as the Tata's brightest light, and head of their flagship steel business.
The rationale then is similar to the logic now - a drift away from what the Tatas deemed the legacy of their empire.
Was this a sudden move? It is difficult to believe that the board members of Tata Sons would take such a decision on a whim. More likely it has been building for months now and yesterday's events were simply the Coup de grâce.
Ironically, Mistry's abrupt firing (NDTV reports Mistry was ambushed and blindsided at the end of a regular board meeting) is perhaps in line with what Mistry himself was trying to do in the first place - re-structure the business from its traditional practices to a more lean, mean modern avatar.
The business that Mistry cut out were loss making indeed, and as publicly available details make it plain, the market cap of the Tatas has jumped by a whopping 75% in the four-year Mistry reign. Admittedly this is on the back of cash cows like TCS, but even factoring all deviations and conditions, no one can pretend Tata Sons is doing worse than when Mistry took over.
It all comes down to style. The Tatas, Ratan Tata especially, if rumours are to be believed, simply did not like how Mistry conducted his business.
The aggressive cutting of losses by the sale of assets went against the indulgent streak the Tatas are famous for.
The closing down of Ratan Tata's ventures, like the UK steel business, is a double blow of sorts since it attacks both Ratan Tata's legacy and that of the Tatas, who don't fire employees wholesale.
The acquisition of new businesses, like a billion-dollar solar venture, without the express approval or even knowledge of the Tatas, probably felt like an insult.
There is also the whiff of scandal. There is the idle talk of construction contracts given to Mistry's family firm Shapoorji Pallonji Group (which controls 18% of Tata Sons).
Also, it is obvious that money is not everything to the Tatas. The Tata group is full of endless stories of millions of dollars spent or lost upholding some value or fulfilling some promise.
Under Mistry, as his bitter fight with DoCoMo proves, this sort of largesse would not be entertained. Another strike against the Tata 'brand'.
There seems to be a fundamental disconnect between what the Tata trusts and the other board members imagined Cyrus Mistry would do and what he envisioned for the Tata group. And he has been shunted out with absolute ruthlessness.
What about the future? Ratan Tata cannot be the chairman of the Tata Group for long. A massive global company cannot be run by an 80-year-old, no matter how charming he is. The Tata Group must get a replacement. And get it fast.
Is there another Tata in the wings?
Last Updated 31, Mar 2018, 7:04 PM