 "Illustration: Ajay Mohanty")
The Tata Sons’ notice to evict Nusli Wadia as an independent director of Tata Chemicals, Tata Motors and Tata Steel accuses the chairman of Wadia group of leading a coup against the Tatas by galvanising all independent directors of the group.
The notice by F N Subedar, chief operating officer and company secretary, Tata Sons, dated November 11, says Wadia is acting in concert with ousted Tata Sons Chairman Cyrus Mistry and against the interests of the group. “Despite purportedly being an independent director on the boards of certain Tata group of companies including in Tata Steel, Wadia has been conducting himself as an interested party, in our opinion, Wadia has been conducting himself as an interested party in a manner that is designed to cause harm to the Tata group,” the Tata Steel notice said.
“He has not been conducting himself independently and instead has been galvanising independent directors and acting prejudicially. Wadia’s action may put the company in grave jeopardy and impact the overall morale of the workers, employees and management who have joined a Tata company. Moreover, he has been a director since several decades and considering all these factors, his continuance on the board is untenable. The principal shareholders have lost confidence in the independence suitability or bonafides of Wadia and seek his removal,” the notice said.
Consequently, the board of directors of Tata Sons by its resolution dated November 10, 2016 has resolved to propose the removal of Wadia as director of Tata Steel. Tata group owns 31.35% stake in the company and the voting by rest of the shareholders will play an important role in the eviction of Wadia and Mistry.
On Mistry, the notice said the Tata Sons board has lost confidence in Mistry for a combination of several factors and the board felt that removal of Mistry as Chairman was absolutely necessary for the future success of the Tata group. The notice did not give reasons.
The notice said Mistry has made several unsubstantiated allegations which cast aspersions not only on Tata Sons and its board but also on Tata group as a whole. The communication, which was marked confidential, was made public. Mistry’s conduct caused enormous harm to the Tata group, Tata Steel and its stakeholders, including employees its shareholders.
“Consequently, it is felt that it would not be appropriate for Mistry to continue as Chairman and as a director of Tata Steel,” the notice said. A similar notice has been sent for Tata Motors and Tata Chemicals also.
On Thursday, the independent directors of Tata Chemicals came out in full support of Mistry. In a similar action, the board of Indian Hotels Company led by senior independent directors Deepak Parekh, Nadir Godrej and Keki Dadiseth had supported Mistry and his leadership. The Tata Steel board was split and it did not make any public statement.
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