INDIA’S Tata group named a successor yesterday to its veteran chairman and business icon Ratan Tata, bucking tradition by appointing a non-family member for the first time in its 143-year history.
Cyrus P Mistry, an existing director, was promoted to take over at the end of 2012, ending years of speculation over the future leader of one of India’s biggest and most influential groups with interests from steel to salt.
Tata said yesterday that the appointment of Mistry, a 43-year-old engineer with five years experience in the group who is related to the boss by marriage, was a “good and far-sighted choice”.
“He has been on the board of Tata Sons since August 2006 and I have been impressed with the quality and calibre of his participation, his astute observations and his humility,” he added.
“I will be committed to working with him over the next year to give him the exposure, the involvement and the operating experience to equip him to undertake the full responsibility of the group on my retirement.”
Ratan Tata, a bachelor with no children, took over the family business Tata Sons in 1991 and is credited with building it into an international behemoth with worldwide sales totalling $83.3bn (£53.58bn).
The softly-spoken and low-profile industrialist, 73, had announced he would retire by December 2012 leading to a global search for a new leader in which his younger half-brother Noel was tipped as a leading contender.
Mistry, who will initially become deputy chairman and shadow Tata for a year until he retires, said in a separate emailed statement that he was “deeply honoured” to be chosen.
He said he was “aware that an enormous responsibility, with a great legacy, has been entrusted to me”.
Mistry is currently the managing director of the property and construction group Shapoorji Pallonji Group, which has an 18-per cent stake in the Tata conglomerate.
He has been a director at Tata Sons for more than five years and is a civil engineer graduate from Imperial College, London, with a master’s degree from the London Business School.
His sister is married to Ratan Tata’s younger half-brother Noel and he sat on the five-member committee formed last August that conducted a global search for the new boss.
The Tata group was founded by Ratan Tata’s great-great-grandfather Jamsetji Nusserwanji Tata in 1868 and has developed into one of India’s most well-known and trusted brands.
It comprises more than 100 companies operating in more than 80 countries and had a total revenue of $83.3bn in 2010-11. Some 58 per cent of revenues came from business outside India.
Its 31 publicly-listed firms have a combined market capitalisation of about $77.44bn (£47.86bn) as of mid-November and employs more than 425,000 people worldwide.
Prominent companies in the group include British luxury car marques Jaguar and Land Rover, European steel giant Corus and Tata Consultancy Services, which is India’s leading software exporter.
It also owns the Indian Hotels Company, which operates the Taj chain, including the Taj Mahal Palace and Tower in Mumbai, which was the focus of the deadly 2008 Islamist militant attacks on the city that killed 166.
Pramod Gubbi, vice-president with Mumbai brokerage Ambit Capital said the group would “miss the vision and direction which Ratan Tata has provided”.
Major deals like the acquisition of Corus and Jaguar-Land Rover would not have happened without him, he added.
“Operationally there would be no change (for the group), as several experienced professionals are in the top management for group companies” Gubbi told reporters.
Mahantesh Sabarad, auto analyst with Fortune Equity Brokers, said: “A younger man could bring dynamism, fresh ideas and a lot of hope.
“This is exactly what a younger Ratan Tata brought to the group, when he took charge.”
