Cyrus Mistry vs Tata Group – decoding the prestige battle between India’s most prominent Parsi families
Mistrywas once loved by Rata Tatawho called him shrewd and humble, then named him his successor in 2012.
- Mistry became the sixth
Tata Grouppresident, and only the second without a surname Tata.
- However, Mistry’s rise to the top of India’s largest conglomerate was short-lived, with
Ratan Tatahimself ousting Mistry in a “palace coup” in 2016.
- Here is an overview of the history between the Mistry and the Tatas, the most important Parsi families in India.
Cyrus Mistry’s untimely death in an accident near Mumbai came as a shock to many, but it also reopened the saga of his protracted battle with the Tata Group and Ratan Tata.
Mistry was otherwise a very reclusive and private person, and little is publicly known about her life. However, his battle with the Tata Group was as public and explosive as it gets, where he locked horns with Ratan Tata, the group’s managing director at the time, R Venkataramanan, and other senior officials.
Mistry served as chairman of the Tata Group for four years, from 2012 to 2016. During his tenure as chairman, Mistry is credited with overthrowing Tata Motors, but he appears to have ruffled some feathers during his tenure. His reclusive nature meant he did not host a single press conference during his four years as the group’s chairman.
But what could have gone wrong for two of the country’s most prominent Parsi families to come face to face, despite a 90-plus-year partnership?
Tatas and Mistrys – how it all started
Tatas and Mistrys share nearly a century of relationship spanning three generations.
It all started in the 1930s when Shapoorji Pallonji acquired a 12.5% stake in Tata Sons – the owner of the Tata Group – from the estate of FE Dinshaw. SP Group’s stake increased to 18.5% after a rights issue in 1996.
Since then, the Pallonjis have remained discreet partners of the Tata group. According to some estimates, their investments amounted to only $11 million for their stake in the Tata Group, but the value of these investments has soared to several billion dollars over the years.
Who was Cyrus Mistry?
Born in 1968, Mistry earned a civil engineering degree from Imperial College London. He joined his family’s construction company, Shapoorji Pallonji & Co., as a director in 1991.
His connection with the Tata Group began in 2006, when he took on the role of administrator a year after his father’s retirement. He was later elevated to Vice Chairman of the Tata Group.
When Ratan Tata finally retired as chairman of the group in 2012, Mistry replaced him and became the sixth chairman of the Tata group – and only the second not to carry the Tata surname.
“A meeting of convenience”, and not of conviction?
Unlike Ratan Tata’s ascension to the throne as head of the Tata Group, Mistry’s elevation was viewed by some in the industry as an “appointment of convenience”, not conviction.
The eventual return of Ratan Tata as Chairman of the Tata Group in just four years lends even more credence to this thought.
When Mistry entered the family business in 1991, Ratan Tata was appointed chairman of the group by his uncle, JRD Tata. Since then, the family patriarch has reigned over the affairs of the group.
How Tata-Pallonji’s decades-long partnership fell apart
Mistry, despite her reserved nature, has worked hard to lead the future of the Tata Group. He voiced his opposition to the group’s often costly decisions – such as acquiring Jaguar Land Rover, or rolling out Ratan Tata’s pet project, the ₹1 lakh Nano car.
Mistry also voiced opposition to investing in the cash sink that is the aviation sector – Tata Sons eventually acquired a 51% stake in a $100m venture, well above the pledge. Mistry agreed to a 30% stake in a capital of 30 million dollars.
Mistry’s ousting from the Tata Group has been called a “palace coup” by many in the industry. His setback against the Tatas and his attempts to steer the group towards a low-debt, high-margin regime ultimately led to his downfall.
A nasty public spat
While Mistry liked to keep a low profile, her run-in with the Tata Group was as public as it gets.
Eventually, Tatas’ relationship with Cyrus Mistry fell apart so badly that Mistry was unceremoniously ousted as president. This resulted in a legal tussle a few months later, moving from the NCLT to the Supreme Court of India.
India’s top court has finally ruled against Mistry and dismissed a review petition filed by the SP Group earlier this year, ending the ugly 6-year long legal battle that has frayed ties between the two Parsi families. largest in India.
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