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Cyrus Mistry: The Wise Young Owl

By AMAN NATH
September 09, 2022 10:27 IST
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'Cyrus was always very different. He would think before acting.'
An exclusive excerpt from Changing Skylines: The Shapoorji Pallonji Sesquicentennial 1865-2015.

Illustration: Dominic Xavier/Rediff.com
 

When thinking of a leader to replace him, Ratan Tata had said way back in 2003, "We are trying to identify star performers in the group -- between 100-150 of them -- in the ages of 35-45 and 45-55.

"And what we'd like to do is to expose these people, obviously the 35-45 category one way and the 45-55 another way, to a variety of industries and functions and interactions with the Group Executive Office, with the executive directors, so that they have greater visibility within the group and are better groomed for positions."

Many years later, just before Ratan Tata's term as chairman was to end, and the head hunt for a new person to lead India's most venerable group had begun, a committee was formed (without Ratan) and the search took them far afield.

Merit was to be the main criterion and no effort was spared to scout, meet and interview potential candidates: Indians, NRIs and even foreigners.

Then, surprisingly, when the Tatas had looked in every direction, the search ended much closer home than they had expected -- in fact, right under their nose.

Looking at a host of factors, the board jointly decided that the choice must be based both on a combination of youth, wisdom and merit.

The comfort level of a stakeholder who would go the full length to see the Tata fortunes rise -- along with his own family's was certainly a point in favour of Cyrus Mistry.

Aged just 44, the younger son of Pallonji proved to be the ablest.

Pallonji was, in fact, surprised when Ratan Tata anointed Cyrus as his successor.

To some, this decision seems to have remarkable sagacity and foresight.

As for the critics, time itself shall tell about the wisdom of the 'wise, young owl'.

Cyrus Mistry left his ancestral company immediately after the announcement.

He parted with as much joy as could fill a heavy heart.

But he says that he learned almost overnight in his new role, how to 'wear a single hat'.

Frenny Billimoria, a common acquaintance of Ratan Tata and Cyrus Mistry, tells a story that reveals how unassuming the new Tata chairman is: "One day, the two gentlemen set out for an evening reception in London.

Cyrus suddenly realized that he was not wearing a necktie.

There was no time to go back to the hotel and pick up one, so he requested the driver if he could borrow his.

The driver sportingly agreed, and the evening went off well.

Even now, when Ratan meets Cyrus, he occasionally quips. 'Whose tie are you wearing?'

Colleagues say that Pallonji Mistry plays fair in whatever he does.

His paternal instincts came to the fore when his younger son Cyrus returned to India in the early 1990s, armed with a civil engineering degree from Imperial College in England.

Mistry wanted to acknowledge his son's entry into the family business.

As SP was the moniker for almost every unit in the group, Pallonji decided to name some companies after Cyrus.

The investment company FED Ltd was accordingly rechristened Cyrus Investments in 1978.

Having created a structured organization with modern management techniques, Pallonji delegated authority to senior executives, while retaining supervisory powers.

He encouraged his people to come up with fresh ideas, even if he did not always particularly fancy what he heard.

"I will back your decision," he would reassure them.

"If it's right, you take the credit and if it goes wrong, will take the blame."

Such actions have sustained the group's reputation as a fair player, a legacy Pallonji will leave for his sons and for his grandchildren who are taking baby steps in the family-run business house.

IMAGE: February 13, 2016: Then Tata Sons chairman Cyrus Mistry briefs Prime Minister Narendra Damodardas Modi in Mumbai. Photograph: PTI Photo

In 1924, when Tata Steel was reeling under a large debt, including a government loan of Rs 5 million (Rs 50 lakhs), besides a low demand for their goods, a motion was proposed at their directors' meeting that the government be asked to take over Tata Iron & Steel Co, or TISCO (now Tata Steel Ltd).

R D Tata, a partner of the founder and father of J R D Tata, got up and pounded the table saying that such a day would never come in his lifetime.

Motilal Nehru and M A Jinnah also stood up for TISCO in the Central Legislative Assembly.

Later, Dora Tata pledged his entire fortune, including his wife's jewellery, to put together Rs 10 million (1 crore). A similar amount was borrowed from Gwalior state.

Shapoorji Pallonji was the Tatas' preferred contractor. When JD's sister Rodabeh Sawhney decided to sell her lot of Tata Sons' shares and asked JRD if he would buy them, he said nobody was ready to buy the shares of a holding company.

Later, JRD told her the only person who had money was Pallonji Mistry, and so she sold her shares to him.

Lady Scylla Petit, JRD's other sister, later did the same.

Darab Tata, the brother of JRD, was also to follow.

"He came to me with a Parsi broker who lived in Pallonji Mansion at Colaba. Just like my father, I was happy to invest in any clean business that brought profits," Pallonji recalls.

"Then it was Nani Palkhivala who took me into JRD's room in the Tata Sons office at Bombay House and asked me to sign a letter promising not to make any demands on the Tatas for the next five years.

"I willingly did so, to bring them whatever level of comfort they desired. When I had 18.4 per cent shares, I don't know who started the rumour that the Dinshaw shares had been gifted to me, but I know that I had bought them," Pallonji reiterates even today. "But I fully supported the Tatas.

IMAGE: Then Tata Sons chairman Cyrus Mistry speaks as Chinese premier Li Keqiang, left, listens at the Tata Consultancy Service office in Mumbai. Photograph: Vivek Prakash/Reuters

SP was looking to diversify into the infrastructure space and, when an ageing AH Diwanj put Afcons up for sale in 2000, Pallonji and Shapoor were keen to acquire it, their decision bolstered by Cyrus's civil engineering expertise.

Appointed director of Afcons, Cyrus brought in a new management team and was instrumental in the turnaround of the company.

In 2003, he was elevated to Non-Executive Chairman, a position he held till he moved to the Tata group.

Under his guidance, Afcons undertook several complex engineering jobs in India and abroad.

By 2012, Afcons had received Indio's Most Admired Companies award from Construction World for six years in a row.

Cyrus Mistry's entrepreneurial streak helped the SP group achieve many firsts.

In 2001, he established one of India's first integrated, project-financed power plant, Samalpatti Power, conceived in collaboration with the Tamil Nadu government.

Despite many challenges, including the early exit of a foreign partner, the project was successfully completed on schedule, with Cyrus moving quickly to bring a new international partner, US-based Ogden Energy, on board.

Around the same time, Cyrus also pioneered the development of India's first biotechnology park in collaboration with the Andhra Pradesh government.

The park became the largest such in the country, with strategic partnerships with several leading biotech clusters and international research parks including Research Triangle Park, North Carolina, USA, and the Biotechnologiepark Luckenwalde Berlin, Germany.

IMAGE: Then Tata Sons chairman Cyrus Mistry speaks to shareholders during the Tata Consultancy Services' annual general meeting in Mumbai. Photograph: Vivek Prakash/Reuters

Cyrus Pallonji Mistry, or CPM as he is known at SP, has always had an eye for detail, and often preferred to work alongside his colleagues during tough assignments.

Few people know that just after the war in Afghanistan, Cyrus was one of the first businessmen to risk visits to the country -- travelling there in 2003 to restore the Serena Hotel for the Aga Khan Foundation.

"There was no proper immigration at the airport. There was no decent place to stay either," he recalls. But the job had to get done and it did get done.

Cyrus envisioned an end-to-end operation which would span contracting, constructing and financing, leading to the birth of SP Infra, a pure infrastructure developer.

Today, the Trichy tollway and the Jammu-Udhampur Highway stand as proud testimonies of the company's capabilities.

As managing director, in charge of the SP group's flagship construction company, Cyrus was instrumental in moving the company away from a pure contractor to a 'value-added' player by developing competencies in areas such as 'Design & Build', an expertise that helped it win orders from almost every international automobile company that set up factories in India.

By 2010, it had established offices across India, the Middle East and in Africa, and earned a reputation for being able to execute complex projects in far-flung regions such as Libya, Ghana, Mauritius, Algeria, Saudi Arabia, Qatar and the United Arab Emirates.

IMAGE: Then Tata Sons chairman Cyrus Mistry with Ratan Tata, his predecessor. Photograph: PTI Photo

After Cyrus Mistry took over as chairman of the Tata group, the two conglomerates do not contract to work together, in adherence to the rules of strict corporate propriety.

So, if in one sense the House of Tata opened one door to the younger son of Pallonji Mistry, it has also, with the same hand, shut another.

In many ways this is a loss to both, as they shared a long and trusted working relationship, but it has put them beyond the pointing of fingers.

IMAGE: Then Tata Sons chairman Cyrus Mistry at the Vibrant Gujarat Summit at Gandhinagar. Photograph: Amit Dave/Reuters

CYRUS MISTRY: THE WISE YOUNG OWL

When we met Cyrus again, sometime later, I thought that even though he was younger than his brother, he came across as a wise owl.

A rhyme from my childhood came back to me as I talked and he listened.

"A wise old owl sat on an oak/The more he sat, the less he spoke/The less he spoke, the more he heard/Why aren't we like the wise old bird? Later, he validated my intuition, saying. "You can't contribute till you listen and learn."

The wise, young Cyrus admits to a self-critical streak.

"In 1991-92 when I returned from the UK, we were a very small-sized company. We had offices in Bombay, Pune and Delhi. Our Middle East operations, which had prospered from 1971 till the mid-1980s, had declined. I felt we had missed out on some opportunities."

Since then, regional SP centres were opened in Kolkata, Chennai and Ahmedabad.

"I used to read Popular Mechanics and science magazines, make Meccano buildings and aeroplanes at the age of ten. Then an old sutar taught me carpentry.

"I was also lucky because Sumant Moolgaonkar, who was a Fellow at Imperial College, London and the former head of Tata Motors, bequeathed his Lonavala workshop to me." It is here, Cyrus confesses, that his experimental engineering skills developed as he learned to work with his hands.

Later, at a private meeting, Patsy opened up about her sons.

I was to discover a somewhat heavily guarded, but open secret: "We gave our sons watches when they turned sixteen. At eighteen came the real gift -- a car of their choice. When Shapoor turned 21, he asked for a red Ferrari.

"But then he didn't really have the pocket money to put petrol in it," she recalls, "so he would save money by not eating out. But he wouldn't ask money from his father.

"Even my parents (the Dubashes) never gave us any pocket money. I would always say to my children, 'You are Shapoorji Pallonjis, you must spend carefully.

"Cyrus was always very different. He would think before acting. When he turned 21, his father naturally thought he would like the same gift of a red Ferrari, but was surprised when Cyrus asked for time to think over it.

"Later, he came back to ask for a Ford Sierra Cosworth. It was a limited edition car -- but discreetly black in colour."

In a previous meeting, Patsy Mistry had made a distinction between her two sons, likening Cyrus's traits to hers and describing Shapoor as his father's son.

She says that while Shapoor's heart and soul lay in creativity and exploration, Cyrus liked making and building things.

On closer analysis, this seemed somewhat simplistic, as many traits of both parents seem to have found a happy co-existence in Shapoor and Cyrus.

Together, the brothers have made the group company's turnover soar from Rs 300 million (30 crores) when they joined the family business to Rs 180 billion (18,000 crores) today.

SP operates in 45 countries across Europe, the Middle East, South East Asia and Africa, and has grown four-fold in the last five years.

Now, it is not just the skyline that is being changed' by the group, but the horizon itself that awaits new surprises.

Excerpted from Changing Skylines: The Shapoorji Pallonji Sesquicentennial 1865-2015 with kind permission of the Shapoorji Pallonji group.

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