Cyrus Mistry, the man who made the elephant dance

When a media consultant made a presentation to Cyrus Mistry, pitching how he could help create the brand Cyrus Mistry, the then chairman of Tata Sons asked him, “Do you know who is the chairman of 3M?", referring to the American conglomerate which is famous for Post-Its.

He wanted to make the point that the company/group brand is more important than the personality, says a person close to Mistry who narrated the incident.

Mistry and his family, the Shapoorji Pallonjis, have always been reticent when it comes to public interactions, or at least when it came to the media. His father Pallonji Shapoorji Mistry was known as the “Phantom of Bombay House", for his quiet yet powerful presence at the headquarters of the 148-year-old group. The Shapoorji Pallonji group owns a little over 18% of Tata Sons and is the largest minority shareholder.

“They guard their privacy zealously," says another top official at one of the Shapoorji Pallonji Group companies. This person, who has been associated with the firm for more than 25 years, says the family does not believe in “wearing their wealth on its sleeves".

Cyrus Mistry himself didn’t give a single interview in the nearly four years he was at the helm of the then $103 billion salt-to-software conglomerate (Rs7.02 trillion), barring a couple to an in-house website. In the two months since his abrupt ouster, he has probably had more media interactions than in all his 48 years till then.

Cyrus Mistry at Bombay House after the announcement of his ouster. Photo: PTI

He had no choice really.

On 24 October, Mistry was replaced as the chairman of Tata Sons in a boardroom coup; a bland press statement from the Tata group holding company announced the change without offering any details. He was replaced by his predecessor Ratan Tata as interim chairman.

The Tatas expected him to go quietly into the night, without a murmur, but Mistry refused to step down from the boards of the Tata operating companies, pointed out a list of alleged corporate governance violations within the Tata group, and warned that the listed companies were collectively staring at an $18 billion write-down.

“They mistook Cyrus’ quiet confidence and inner strength as his weakness. They probably never thought what would happen the day after they fired him," Nirmalya Kumar, who was part of the core group executive council (GEC) formed by Mistry till he was fired, told Mint in a 23 November interview.

A quiet, studious-looking man, Cyrus Mistry can easily pass off as your next door neighbour in the Parsi heartland of Cusrow Baug in south Mumbai. A reserved person, he has been accused of remaining aloof from Tata Sons board members and allowing the GEC to ride roughshod over group executives.

“Cyrus should have given more importance to the advice of Tata Sons directors. But instead he relied more on the chief executives of operating companies," says the director of a Tata company who did not want to be identified.

Mistry loyalists see his reserve as a mark of professionalism.

“In my four years of working with him, I have been to his house only for the annual party," says the person who was quoted earlier. “He is professional and keeps to himself. But at the same time, his mobile number was available with at least hundreds of Tata group executives."

Mistry was part of the search committee that was formed to find a replacement for Ratan Tata when he was due to retire in 2012. He reluctantly agreed to become the chairman of Tata Sons on being convinced by chairman and founder of Warwick Manufacturing Group Sushanta Kumar Bhattacharyya and Tata himself after a nearly two-year search failed to throw up a suitable candidate.

“If it was anyone who understood the Tata ethos and value systems, it was Cyrus. This was one of the reasons for their choosing him over the others. It’s very sad, they now think that the man who was the best for the top job, till a few years back, is now eroding the very same values," says a Tata old-timer on condition of anonymity.

After taking over, Mistry told Tata group executives not to do business with his family-owned Shapoorji Pallonji group companies.

“Contrary to allegations that he did not distance himself from his family business even after becoming the chairman, he has been very strict about it," says the Shapoorji Pallonji official cited earlier. “He is a man of high integrity who will go to any extent to protect the family name."

Sharp lines have been drawn between Tata and Mistry loyalists, but there is some grudging respect from the opposition camp for Mistry. Three directors on the boards of Tata-listed companies told Mint that Mistry was hard-working, a hands-on manager. A Mint profile at the time of his selection as chairman quoted associates as saying that he was more likely to be seen supervising work at a construction site than in a cabin in the office.

“I must mention this very clearly, that I hold Mistry in very good personal regard," Harish Bhat, who was part of Mistry’s core team and is now brand custodian of the Tata group, said in a 16 December interview. “I have had several discussions with him (when working together). Those discussions were very cordial, very professional."

Mistry’s aides often like to point out that he had got the highest praise from the directors of listed companies when they evaluated him as chairman.

Such niceties, however, have been lost in the war of words and mud-slinging that has followed Mistry’s ouster.

The Tatas say Mistry lost the confidence of Tata Trusts, the ultimate owners of Tata group companies, that the companies under his helm weren’t paying enough dividends, and that he betrayed the trust of the group by trying to take control of the Tata operating firms.

Mistry took the war into the enemy camp, targeting Ratan Tata himself and his friends and associates such as C. Sivasankaran, Bhattacharyya and Mehli Mistry. Statements from Mistry and his office alleged that “Tata does not speak the truth", and maintained that some business decisions—which Mistry deems imprudent—were the result of “one man’s ego".

What gave Cyrus Mistry the strength to take on a stalwart like Ratan Tata?

“The fact that I haven’t done anything wrong," he said in one of the press interactions after his ouster.

“I am waiting (for the Tatas to give a reason for the abrupt sacking). Eight weeks have gone by today, have you heard a cogent statement? I’m waiting," he said in a 19 December interview to Mint.

Mistry refused to be interviewed for this profile. One of the statements he put out, however, said that his effort to reform the system from within was a probable reason for his ouster. In the days that followed his ouster, he has given the Tatas a tough time, taking some of the sheen off the group that is often touted as the flag-bearer of corporate governance in India.

“Given the serious nature of governance issues raised by Cyrus Mistry, the Tata reputation for cleanliness in management has been dented severely," says Shankar Sharma, vice-chairman and joint managing director of securities firm First Global.

Mistry has put the group on the defensive and his allegations have prompted the capital markets regulator, the Securities and Exchange Board of India, to ask stock exchanges to seek an audit of some Tata group listed companies. The Tatas termed these “baseless, unsubstantiated and malicious allegations using selective disclosures of information against the very institution he claims to have the highest regard for".

Mistry’s latest move was to resign from the boards of operating companies just ahead of a series of shareholder meetings called to oust him. He sought to take the moral high ground, citing uncertainty for stakeholders, and to “make sure that the battle wasn’t about me".

A day later, his family-controlled investment firms filed a suit at the National Company Law Tribunal against Tata Sons, its directors, Tata Trusts and their trustees, alleging mismanagement of the holding firm and oppression of minority shareholders.

The tribunal has asked Mistry to prove his allegations against Ratan Tata, the Tata Trusts and others named in the petition with material facts.

These actions haven’t met with universal approval, however.

“My main problem with Mistry is, why did he remain silent all this while when he was chairman of the group?" says the head of an investment advisory firm who didn’t wish to be identified.

Mistry himself has said he “had confronted and was grappling with serious governance problems and ethical issues for a considerable period of time," but there aren’t too many takers for that answer.

Indeed, the tribunal, at its hearing last week, asked, “Are you taking out your grudge here because you (Mistry) have been sacked?"

The next hearing is on 31 January. With his plan to take the fight to a larger platform, Mistry has dug in his heels for a messy and probably long-drawn legal battle. He is likely to stay in the news in 2017 too.

Mistry’s history at Tata Sons

■ September 2006 Cyrus Mistry replaces his father Pallonji Shapoorji Mistry on the board of directors of Tata Sons

■ August 2010 Cyrus Mistry is part of a search panel formed to hunt for Ratan Tata’s successor

■ November 2011 A search panel recommends Mistry’s name as chairman after a 15-month search. He is appointed deputy chairman for a year, till Ratan Tata retires

■ December 2012 Mistry takes over as chairman of the Tata Sons board

■ April 2013 Mistry sets up a group executive council to provide strategic and operational support to the group chairman

■ May 2013 Tata Steel announces a $1.6 billion write-down on its struggling European division

■ July 2014 NTT DoCoMo says it wants to exit the partnership with Tata Teleservices on previously agreed terms. Unable to find an external buyer, Tata Sons applies to the Reserve Bank of India to buy the stake itself. This is rejected. A messy legal battle begins

■ July 2014 Mistry announces his Vision 2025 plan which aims to put Tatas among the top 25 companies in the world. The group says it will invest about $35 billion over the next three years to focus on new business areas such as infrastructure, defence and aerospace, and expand its global footprint

■ June 2016 The nomination and remuneration committee of the Tata Sons board recommends a raise for Cyrus Mistry. It also discusses formalizing the governance structure between various entities in the group, such as Tata trusts, the trustees and boards and directors of group operating companies

■ October 2016 The Tata Sons board decides to replace Mistry as chairman; Ratan Tata takes over in the interim.

■ November 2016 A full-blown war of words erupts between Mistry and the Tatas. Mistry alleges corporate governance violations, the Tatas allege that Mistry has betrayed their trust, lost the confidence of directors and is trying to take over the group

■ November 2016 Mistry refuses to step down from the boards of listed operating companies. Independent directors get caught in the fray; Tatas call for shareholder meetings to eject Mistry from group companies

■ December 2016 Mistry gets voted out of Tata Consultancy Services; decides to step down from the boards of operating companies citing shareholder uncertainty, and promises to take the battle to a larger platform

■ December 2016 Two investment firms controlled by Mistry’s family move the National Company Law Tribunal to protect their interests against the mismanagement and oppression of minority shareholders at Tata Sons. The tribunal asks Mistry to prove his allegations. The next hearing is on 31 January.

Ami Shah contributed to this story.