Tata Sons, the holding company for India’s largest business conglomerate, has appointed Shapoorji Pallonji Group’s Cyrus P Mistry as the successor to Ratan Tata. Mistry will be the deputy chairman of Tata Sons and will take over after Ratan Tata steps down in December 2012. Mistry is the younger son of Pallonji Shapoorji Mistry, the single largest shareholder in Tata Sons.
This brings to an end speculation that for the first time someone from outside the Tata family including an expat could become the head of the firm with multi-billion dollar assets. Earlier, Noel Tata, a half brother of Ratan Tata, was said to be the front runner to take over as the chairman. Incidentally, Noel Tata is married to Cyrus Mistry's sister.
“The board of directors of Tata Sons, at its meeting today, appointed Cyrus P Mistry as deputy chairman. He will work with Ratan N Tata over the next year and take over from him when he retires in December 2012. This is as per the unanimous recommendation of the selection committee,” the Tata Group said in a statement.
Cyrus Mistry, aged 43, joined the board of Tata Sons in August 2006 after Pallonji Mistry stepped down as he turned 75.
Cyrus joined the Shapoorji Pallonji Group in 1991 as a director and after the acquisition of AFCONS, he became its director and chairman in 2003. He is also a trustee of the Breach Candy Hospital Trust and also on the board of Imperial College India Foundation. He is a civil engineering graduate from Imperial College, London, and holds a Master’s degree in Management from the London Business School.
Interestingly, Cyrus was also part of the five-member selection committee to choose a successor to Ratan Tata. Other members included NA Soonawala, former vice-chairman of Tata Sons; RK Krishna Kumar, non-executive director of Tata Sons; Lord Kumar Bhattacharya, UK-based founder of the consultancy Warwick Manufacturing Group and Shirin Bharucha, a lawyer working for the group.
“The appointment of Cyrus P Mistry as deputy chairman of Tata Sons is a good and far-sighted choice. He has been on the board of Tata Sons since August 2006 and I have been impressed with the quality and calibre of his participation, astute observations and humility. He is intelligent and qualified to take on the responsibility being offered and I will be committed to working with him 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 my retirement,” said Ratan Tata in a statement.
About 66 per cent of the equity capital of Tata Sons is held by philanthropic trusts, endowed by members of the Tata family. The biggest of these trusts are Sir Dorabji Tata Trust and Sir Ratan Tata Trust, which were created by the families of the sons of Jamsetji Tata.
Tata Group has over 100 operating companies and revenues of $83.3 billion in FY11, with 58 per cent coming from international markets. The group has a presence in areas like IT, communications, engineering, materials, hospitality, services, energy, chemicals and consumer products.