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Last Updated Monday May 29 2017 07:31 AM IST

Cyrus Mistry's removal: battle of families ahead?

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Cyrus Mistry and Ratan Tata Cyrus Mistry and Ratan Tata. File/PTI

In an unprecedented move, Tata Sons, on Monday removed Cyrus Mistry from the helm. With just four years as the chairman of the group, it is also one of the shortest tenures.

There is a lot of speculations on the reason behind the move -- both within and outside the company.

A statement put out by the company says that the decision is based on “the recommendation of the principal shareholder.” While Tata Trusts, headed by Ratan Tata, is the principal shareholder, the Shapoorji Pallonji group is the largest shareholder with 18.5 percent of the equity.

Also Read: Tata Sons replaces Cyrus Mistry as chairman

The Shapoorji Pallonji group is Cyrus Mistry's family's business empire. Several reports suggest that this group is against the decision to remove Mistry and has termed it illegal as a minimum 15 day noticed was not served.

Mistry's appointment in 2012 was the first time the Shapoorji Pallonji group tried to exercise its control. It was also seen as a change in leadership from the old guard to the young talent.

While some are calling the decision to replace Mistry as a 'board meeting coup', we can safely assume that as chairman of Tata Trusts, Ratan Tata was involved in the decision.

If reports about Pallonji group's opposition are to be believed, then the issue might flare up in the coming days as a battle between the Pallonji and Tata families.

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