Ratan Tata, who Mistry had replaced on December 29, 2012, has been appointed as interim chairman for four months.
In a dramatic development that took the corporates and others by surprise, Cyrus Mistry was today sacked as Chairman of Tata Sons and was replaced by Ratan Tata, from whom he had taken over the reins of the over USD 100 billion salt-to-software conglomerate four years ago.
The surprise announcement came after the Board of Tata Sons met here and decided to replace 48-year-old Mistry and appoint Ratan Tata, 78, as interim head.
The board named a five-member search committee, which includes Tata, to choose a successor to Mistry within four months.
The replacement of Chairman of Tata Sons, Cyrus Mistry was done keeping in mind the "long-term interest" of the company, according to a spokesperson.
Mistry was chosen as Tata's successor in November, 2011, and was appointed Deputy Chairman of Tata Sons, whose board he had entered in 2006. He was made chairman on the basis of his representation from Shapoorji Palonji, the largest shareholder in Tata Sons.
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There were no reasons given for the change of leadership of the man who was brought in with much fanfare but it is believed that Tata Sons was unhappy with Mistry's approach of shedding non-profit businesses, including the conglomerate's steel business in Europe, and concentrating only on cash cows.
"Tata Sons today announced its board has replaced Mr Cyrus P Mistry as Chairman of Tata Sons. The decision was taken at a board meeting held today," a Tata Sons statement said.
Tata Sons is the main holding company of the group.
CEOs at the operating company level of the group have not been touched in the rejig, company sources said.
The board constituted a selection committee comprising Tata, TVS Group head Venu Srinivasan, Amit Chandra of Bain Capital, former diplomat Ronen Sen and Lord Kumar Bhattacharya. All of them, except Bhattacharya, are on the board of Tata Sons.
"The committee has been mandated to complete the selection process in four months," it added.
MISTRY WAS A NATURAL CHOICE
Mistry is the son of the single largest shareholder (18.5 per cent) in Tata Sons and it was only fitting that he should take over the Rs 3,61,217 crore group headquartered in Mumbai's Homi Mody Street.
Eighty-two-year-old construction magnate Pallonji Shapoorji Mistry, chairman of the Rs 12,500 crore Shapoorji Pallonji Group, ranked 103 on the Forbes India Rich List, was known as the Phantom of Bombay House because he was never seen there. But his 43-year-old son, Cyrus Pallonji Mistry, became only the second non-Tata (after Nowroji Saklatwala who was chairman between 1934-38) to head the 143-year-old Tata Group in 2012.
On November 23, 2011 the search committee which initially included Mistry himself (he recused himself subsequently) after considering 14 persons selected the single largest shareholder in Tata Sons as the inheritor.
It was believed that others who were considered were Ratan Tata's half brother Noel, 54, who many thought was a shoo-in; former Vodafone CEO Arun Sarin, 57; PepsiCo CEO Indra Nooyi, 56; Operating Partner, Clayton Dubilier & Rice, LLC, Vindi Banga, 56; Citigroup CEO Vikram Pandit, 54; with even Google's Nikesh Arora, 43, seen as a dark horse.
