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India's Tata Sons picks quiet industrialist Cyrus Mistry to succeed Ratan Tata in a year
MUMBAI, India (AP) ' Board member Cyrus Mistry will take over from leading Indian industrialist Ratan Tata when he retires as chairman of Tata Sons next year, the board said Wednesday.
Mistry was appointed deputy chairman of Tata Sons, the holding company for a sprawling salt-to-SUV family empire, and will hold that job as Tata grooms him to take over in December 2012.
Tata Sons owns the Jaguar and Land Rover brands, as well as Tetley Tea. It is one of India's oldest industrial houses and comprises over 100 companies, including Tata Steel, Tata Motors and Tata Power, with revenues last fiscal year of $83.3 billion.
Most analysts had expected Tata to appoint a successor from within the bloodline. Tata's younger half brother, Noel, was a frequently discussed heir. Cyrus' sister is married to Noel.
Mistry, 43, is the youngest son of Pallonji Mistry, whose family is the largest individual shareholder in Tata Sons with an 18 percent stake.
He is currently managing director of the Shapoorji Pallonji Group, which has interests in construction, real estate, infrastructure and textiles.
Mistry was appointed to the Tata Sons board in 2006 at the urging of Ratan Tata himself, said Indrajit Gupta, the editor of Forbes India.
"It's big shoes to fill," Gupta said. "Does he have the experience to lead a diversified company of this size? The answer is no. But neither would any other contender."
Cyrus Mistry keeps a low profile, unlike his elder brother Shapoor, who has a reputation for flamboyance, a great love of horses and a risk-taking entrepreneurial streak.
"Cyrus is much more analytical, quiet, reserved. He's done a competent job with the construction business and taking it overseas. He's a good listener from what one hears," Gupta said.
Mistry, who has degrees from London's Imperial College and the London Business School, said he would dissociate himself from his family business to avoid any conflicts of interest.
"I am aware that an enormous responsibility, with a great legacy, has been entrusted to me," he said in a statement.
Ratan Tata said he had been pleased by Mistry's work on the board. "I have been impressed with the quality and caliber of his participation, his astute observations and his humility," he said.
India's business community greeted the appointment warmly.
Chandrajit Banerjee, director general of the Confederation of Indian Industry, said it was a sign of good corporate governance and a reflection of the young demographics of India.
"There is a clear message in the trust of the captains of Indian industry in the capabilities of young leaders in the country," he said.