India’s most respected business brand has seen a major shakeup. Tata Sons, the principal investment holding company of the Tata group of companies, just decided to remove its chairman Cyrus Mistry. In the interim, Ratan Tata will serve as the chairman of Tata Sons as the group searched for a replacement. Mistry was appointed in December 2012 and his removal in less than four years has sent shockwaves through the business world. Adding to that, there is no clarity as of now why this drastic decision was taken. Tata has been tight-lipped about why Mistry was removed, giving no reasons in a terse press release. As speculations swirls in the media about why the Tata’s decided to go in for this drastic step, here are the 4 theories on why Mistry was removed.

1. Mistry’s lack of performance

Tata might be India’s most recognised brand name but its financial performance has not been the best during Mistry’s four-year chairmanship. Only two of the Tata group’s companies can be said to performing well: Tata Consulting Services, an IT services firm and the United Kingdom-based Jaguar Land Rover. An analysis by the Economist found that “seven of the nine-largest listed Tata entities in terms of capital employed have negative economic value added, meaning that their earnings before interest and tax translate into a return below their overall cost of capital”. The Financial Times points out that some of the Tata groups biggest companies are facing tough times.

The surprise change in leadership comes after a difficult period for several of the Tata companies, in particular Tata Steel, which has racked up two years of losses and was forced to offload assets in the UK following slumping prices of the metal in Europe. Profits at Tata Motors, the owner of Jaguar Land Rover, have also been hit by slowing demand in China, once its fastest-growing market.

Critics of Mistry accuse him of not doing enough to stem this fall.

2. Disagreements over pruning the group

To say that that Tata group is a behemoth is an understatement. Around the world, few conglomerates can match the spread of the Tatas. The group makes trucks, codes software, serves coffee, distils industrial chemicals, administers universities and even makes salt. The Tatas are present in over 100 lines of business.

Given this level of spread, the Tatas were getting too unwieldy to compete in the market. Different Tata companies would often bid for the same contract and the legal maze of ownership often meant that the group was unable to take advantage of its synergies (for example, offer bundled TV, internet and phone services merging Tata Sky and Tata Docomo). It seems Mistry was aware of Tata’s spread was getting to be a disadvantage. On September 12, he said:

“The group will be supporting this with required capital expenditure investment, which was at a record $28 billion in the last three years and about $79 billion over the last decade. It was clear to me relatively early that one needed to confront the challenging situations facing some of our businesses, and this would entail hard decisions on pruning the portfolio”.

In March, Mistry decided to sell the Tata’s steel business in the United Kingdom. The Mumbai-based Tata Steel, then headed by Ratan Tata, had bought over Anglo-Dutch steelmaker Corus for $12 billion in 2007. According to the Economic Times, this pruning did not go down well with Ratan Tata and was one of the major reasons for Mistry’s removal.

3. Tata-Docomo dispute

CNBC-TV18 held that Tata’s legal battle with Japanese telecommunications major NTT Docomo was responsible for Mistry’s ouster. In 2009, NTT Docomo had acquired a 26.5% stake in Tata Teleservices for $2.7 billion. By 2014, though Docomo had announced its intention of exiting the joint venture citing certain targets not being met. Docomo claims that as per it original agreement, Tata was responsible for finding a buyer for its stake. In June, the London Court of International Arbitration agreed with Docomo and ordered Tata Sons to pay $1.17 billion in damages – an amount that Tata is yet to cough up.

Critics blame Mistry for this financial mess.

4. Personal relations between Ratan Tata and Cyrus Mistry

During his term as chairperson, Ratan Tata changed the character of the Tata Group drastically, making it a global conglomerate from the Indian one it was till then. Under Ratan Tata, the group would buy steel, beverages and automobiles companies in Europe. This is a trend Mistry might be uncomfortable with, given his decision to sell off Tata’s European steel business.

Speculation has swirled that Ratan Tata was responsible for Mistry’s exit. “The Board in its collective wisdom and on the recommendation of the principal shareholders (Tata Trusts) decided that it may be appropriate to consider a change for the long-term interest of Tata Sons and the Tata Group,” said a Tata group spokesman

Tata Trusts, which owns 66% of Tata Sons, is headed by Ratan Tata.