Why Tata Fired Cyrus!

The Tatas, never known for public blowouts, sack their chairman. How did Cyrus Mistry fall from grace so fast?

- Prosenjit Datta with Rajeev Dubey and Nevin John

For Cyrus Mistry and his band of faithfuls, it had been business as usual till as late as Friday, October 21. Most of the Group Executive Council (GEC) members that constituted Mistry’s brains trust in the mammoth Tata Group were apparently unaware of the impending removal of their boss. In fact, just a month ago, in an interaction with this reporter, Mistry had spoken with some pride of the Tata’s tradition of graceful exits. He was speaking in a very different context, of course. Another key team member had expanded on how the Tata way was to ensure that any senior leader, even when being asked to go, would leave with his dignity intact.

It was an indication of how badly Mistry misread the signals coming from the Tata Trusts, headed by his predecessor Ratan Tata, which has a huge say in the board decisions of the Tata Sons, the holding company of the Tata Group. The abrupt way in which the chairman was unseated by the board—hidden under the agenda of “any other business”—did not reflect well on the Tatas who have always built themselves up on doing things the proper way. While legal, it was hardly the most ethical way to remove someone so senior for a group that prides itself on doing not only the right thing, but also the right way. Mistry himself, in a hard-hitting letter to the board, said, “I have to say that the board of directors did not cover itself with glory.... To replace your Chairman without so much as a word of explanation and without affording him an opportunity to defend itself...must be unique in the annals of corporate history.”