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In the interview, Thomas Mathew stated that Ratan Tata initially saw Cyrus Mistry as the right choice for Tata Group, but concerns from senior officials about Mistry’s policies led to Tata’s telling silence
In 2016, Ratan Tata made the decision to remove Mistry from the position of Chairman. (News18 Hindi)
Ratan Tata’s life has been like an open book. Though we know a great deal about his thoughts and actions, it is believed that there is still much to be discovered. In Ratan Tata’s biography “Ratan Tata: A Life”, author Thomas Matthew makes several revelations, which were earlier not in the public domain.
The book provides details about some important decisions in the Tata Group, the challenges and the complex relationships that have existed in the Tata family and its business partners. The book attempts to explain the relationship between Tata Group Chairman Ratan Tata and his successor Cyrus Mistry, as well as the bond shared by Ratan Tata with his stepbrother Noel Tata. Matthew shared several such insights in an interview with PTI.
In the interview, Mathew spoke about the removal of Cyrus Mistry from the Tata Group. He stated that Ratan Tata’s decision to remove Mistry from the position of Chairman of Tata Sons was not made lightly.
Mathew explained that Tata initially believed Mistry was the right fit for the Tata Group, but this perspective shifted over time. When senior officials within the Tata Group began expressing concerns that Mistry’s policies could fundamentally alter the group’s structure, Ratan Tata’s silence spoke volumes.
Although he opted not to publicly express his opinions, stating “no comment” when approached by the media, this silence itself indicated his underlying concerns.
In 2016, Ratan Tata made the decision to remove Mistry from the position of Chairman. This decision, according to Tata, was based not solely on business performance but also on ethical concerns.
Of particular concern to Ratan Tata was the company’s relationship with Tata Group shareholders under Mistry’s leadership and a reduction in dividends. He believed these factors were negatively impacting the funds received by Tata Trusts to carry out their philanthropic work, a matter of great significance to him.
Ratan Tata also considered it important that Cyrus Mistry distance himself entirely from Shapoorji Pallonji Group (SP Group) after assuming leadership of Tata Group. SP Group’s 18% stake in Tata Sons caused discomfort for Ratan Tata. Certain Tata Group stalwarts believed that SP Group’s gradual acquisition of Tata Sons shares exploited vulnerabilities within the family. According to Mathew, JRD Tata shared this sentiment, viewing it as an unfavourable indicator.
Following Mistry’s appointment as chairman, the board of directors at Tata Sons underwent certain changes. Previously, directors of the Tata Group traditionally held simultaneous positions on the boards of Tata Trusts, Tata Sons, and other prominent companies within the group, fostering strong interconnectivity. However, this practice diminished during Mistry’s tenure, leading to dissatisfaction among established figures within the Tata Group. They perceived that Mistry’s approach was disrupting the group’s traditional structure, potentially jeopardising its stability and unity.
The decision to remove Mistry was not an easy one for Ratan Tata. According to Matthew, Tata personally approached Mistry with a letter, suggesting a voluntary resignation. Tata, hoping to avoid any unpleasantness, ultimately had to make the difficult decision to remove Mistry when his suggestion was rejected. Ratan Tata acknowledged that this decision, though painful, was one he deemed necessary for the betterment of the group.
Ratan Tata held a deep emotional connection and affection for his stepbrother, Noel Tata. However, when the time came to choose a successor, Ratan Tata deemed Noel unsuitable for the position.
According to Mathew, while Ratan Tata trusted Noel’s capabilities, he felt Noel lacked the necessary experience to lead a large conglomerate like the Tata Group. This decision-making process within the Tata family demonstrates that in matters of business, familial ties are not prioritised. Instead, decisions are made with the long-term stability and prosperity of the group as the primary considerations.
