Cyrus Mistry’s father supported Ratan Tata as a successor of JRD Tata, but Mr. Tata had to remove his son, Cyrus Mistry, after some years, whom he had only chosen as a successor.
Ratan Tata’s appointment as the successor to JRD Tata at Tata Sons in 1991 was strongly backed by Pallonji Mistry, the head of the Shapoorji Pallonji Group and the largest minority shareholder in Tata Sons at the time. Their relationship evolved beyond business when Pallonji’s daughter married Ratan Tata’s half-brother, Noel Tata. However, the ties between the two families of Tata & Mistry were stronger as Ratan Tata had appointed Cyrus Mistry as his successor, however he only later on removed Cyrus Mistry, as chairman of Tata Sons in 2016.
Pallonji Mistry Backed Ratan Tata
In 1991, Ratan Tata was appointed as the chairman of Tata Sons, the holding company of the Tata Group, succeeding JRD Tata. His selection was strongly supported by Pallonji Mistry, who was also a father of Cyrus Mistry, whose family owned an 18% stake in Tata Sons. This stake made the Mistry family the largest minority shareholder, surpassing even Tata Trusts at the time.
Tata Trusts, due to its charitable status, lacked direct voting rights and was overseen by the charity commissioner. However, in 2000, Ratan Tata pushed for a government amendment that gave the Trusts full voting control, restoring their influence over Tata Sons. Despite these changes, Pallonji Mistry remained a key supporter of Ratan Tata and helped him to strenthen the Tata empire.
Ratan Tata Chose ‘Cyrus Mistry’ As Successor
The business alliance between the Tata and Mistry families eventually turned into a personal connection when Pallonji Mistry’s daughter married Noel Tata, Ratan Tata’s half-brother. Pallonji Mistry served on the board of Tata Sons for 25 years before retiring in 2005, after which his son, Cyrus Mistry, took his place.
In 2011, when it was time for Ratan Tata to choose a successor, he selected Cyrus Mistry. Before stepping down, Tata amended the articles of association of Tata Sons, granting Tata Trusts veto power and the ability to nominate directors. This move effectively placed Tata Sons under the control of Tata Trusts, where Ratan Tata remained chairman, allowing him to oversee his successor’s actions.
Ratan Tata Vs Cyrus Mistry Fight
Initially, the relationship between Ratan Tata and Cyrus Mistry was promising. However, over the years, tensions grew, leading to Mistry’s abrupt removal as chairman of Tata Sons in 2016. This marked the beginning of a major conflict between the two families.
In December 2016, Cyrus Mistry filed a lawsuit against Tata Sons, alleging corporate mismanagement and oppression of minority shareholders. The legal battle drew widespread attention, going from the National Company Law Appellate Tribunal (NCLAT) to the Supreme Court of India.
Tata Won Battle In Supreme Court
The case continued until 2021 when the Supreme Court of India ruled in favor of Tata Sons, dismissing Mistry’s allegations of corporate mismanagement. This was a significant legal victory for Tata Sons and reaffirmed Tata Trusts’ control over the conglomerate.
Meanwhile, Tata Sons’ decision to convert into a private limited company made it difficult for the Mistry family to sell their shares, further affecting their relations. What had once been a strong business alliance, grounded in respect and shared objectives, ultimately turned into a fractured relationship.