The Tatas have bowled a googly that Shane Warne would be proud of. Cyrus P Mistry (43), the next chairman of the Tata Group, was himself on a five-member committee entrusted to select a successor for current chairman Ratan Tata (73, 74 on December 28). No one knew when he left the committee and became a candidate.
Mistry is also an Irish citizen, the first non-Indian who will become a Tata Sons chairman.
While processes can be structured and engineered to ensure at least an appearance of propriety, one cannot deny in hindsight that keeping Mistry on the committee was a masterstroke. Mistry was always on the horizon, cloaked behind a committee. Nobody read the back-of-the-hand release.
The committee had old Tata hands NA Soonawala and RK Krishna Kumar, lawyer Shirin Bharucha and Lord SK Bhattacharya on it, apart from Mistry. He dropped out of this committee when the other members asked him to consider becoming a candidate. After that day, he did not participate in the committee deliberations but submitted himself to the process.
Neither did any one guess that in the end the shadow of Mistry's father Pallonji Mistry (81) would loom large over Bombay House. The senior Mistry is often called "the Phantom of Bombay House," mostly for his 18.5 per cent stake in Tata Sons and his silent presence in the house of Tatas. Cyrus had replaced Pallonji on the Tata Sons board in 2006. That was a surprise as many expected his elder brother Shapur (48) to come on board when Pallonji Mistry retired.
This decision also ensures continuity. The reins of the Tatas will be in parsi hands. After all, the Mistrys and the Tatas are family. Ratan Tata's half brother Noel, often touted in the past as his likeliest successor, is married to Cyrus's sister Aloo. Noel Tata has to feel happy about this transition. At the least, he cannot be too unhappy. It would have been very tough for an unrelated non-Tata professional to lead Tata Sons even as Noel Tata remained a key figure inside it.
The shareholders clearly called the shots at the Tatas this time. While Pallonji Mistry's family controls 18.5 per cent, the bulk of the shareholding is controlled by the Tata Trusts. Ratan Tata as the chairman of most of those trusts still controls almost 66 per cent of the ownership of Tata Sons. As the chairman for life of Sir Ratan Tata Trust and Dorabji Tata Trust, Ratan Tata can still rule the Tata empire from behind the scenes.
It is difficult to believe, though, that nobody else was ever considered. One heard about Indra Nooyi, and Ratan Tata himself has said in interviews that his successor could be a woman or even an expatriate. And Tata himself almost ruled out his brother when he said that Noel Tata's experience is not wide enough and that has been due to Noel Tata's own choices.
Now about his being Irish: Cyrus's father, Pallonji Mistry, has renounced his Indian citizenship to acquire an Irish one, as his wife Pat Perin Dubash was born in Dublin. Pallonji's sons Shapur and Cyrus are natural Irish citizens, due to their mother's natural-born Irish status. His $8 billion fortune makes Pallonji Mistry the richest man in Ireland, although the Mistrys mostly reside in India.
When Pallonji's father Shapoorji Mistry acquired his stake in the Tatas in the 1930s, buying it from different people including parts of the Tata family, then-chairman JRD Tata did not approve the moves. Apparently the two families maintained a quiet peace for many years before relationships became warmer.
If Pallonji has been a ghost of sorts, shunning the limelight, Cyrus goes one step ahead. Hardly anything more is known about him apart from that he is married to Rohika Chagla, daughter of eminent lawyer Iqbal Chagla.
While his elder brother, very much a media recluse himself, is known to be fond of horses and occasional partying, Cyrus Mistry is known to play golf. Mistry is a civil engineer by training. Ratan Tata is an architect. If there is any similarity in their trainings, there are plenty of dissimilarities between their public personas. Ratan Tata has to often speak in public, while Mistry has hardly ever spoken out. He is an unknown.
The Tatas announced one more housekeeping move before ushering Cyrus Mistry into the hot seat. They reduced the retiring age for non-executive directors from 75 to 70. Directors already above 70 were exempted. This meant that while older directors of Tata Sons who are part of Ratan Tata's core team of advisers like RK Krishna Kumar will serve out their terms, younger ones like R Gopalakrishnan and Ishaat Husain will retire soon, allowing the new chairman to build his own team.
Tata is handing over a much larger empire of $80 billion to Cyrus Mistry than what he received from JRD (around Rs 13,000 crore). There will also be a change in the manner in which Mistry manages the group - there are hints that the flagship companies like Tata Steel, Tata Motors and TCS may have different chairmen.