In a dramatic development, Tata Sons, the holding company of $103 billion (around Rs. 6.88 lakhs crore) Tata group, said its board of directors had removed Cyrus Mistry, 48, as the chairman of the Tata group bringing back Ratan Tata as the interim boss for the period of 4 months. This news has hit the stock markets badly and the experts are estimating that it is not a good move from the 150 year old company. To keep the fire controlled among employees, the letter to the group stated that the Board has requested Mr. Ratan Tata to perform the role of the chairman and he has agreed to do so “in the interest of stability of and reassurance to the Tata group”
The actual reason for replacing Mr. Cyrus Mistry is not yet released by the Tata Sons but sources close to the company said that it was due to the performance issues and has been brewing from some time. The turnover of the conglomerate dropped from $ 108 billion from previous year to $ 103 billion during the financial year 2015-16. Not only the revenue of the conglomerate has gone drastically down but also there has been an increase in the Net Borrowings of the company by $ 1.1 billion (approximately) as compared to the previous year.
The board of directors have constituted a committe to choose the new chairman for the giant Tata group. A top source from the Tata group said, ” The selection of the new chairman will be from across the world and all suitable candidates will be considered”. Cyrus Mistry became the chairman in year 2012 when Mr. Ratan Tata took a step down from his position after 21 years. As per the latest news, Mistry will remain as the director of the company till March 2017, a position he held before he became chairman, but he will have to quit as chairman of all group companies.
This news is as shocking for everyone as it is for you, but doesn’t it ring a bell that there might be a possibility of some fraud at Tata sons. We are not stating that there will be one, but there can be one, either on the part of Cyrus Mistry or the Tata Group itself. The sudden come back of Mr. Ratan Tata doesn’t seem to be a good sign for the investors and everyone is keen to know what made Mr. Cyrus Mistry step down after four years and resulted in a sudden come back of Mr. Tata. We hope that this move doesn’t turn out to be another fraud like Satyam. However, with the kind of background that Tata Group has, it is highly unprobable.