 "Minority shareholders move Bombay HC against Wadia’s removal")
Four shareholders at three Tata Group entities — Tata Steel, Tata Motors and Tata Chemicals — petitioned the high court here on Tuesday against the Special Notice by these companies to remove independent director Nusli Wadia from their boards.
They have asked for an order to the Securities and Exchange Board of India (Sebi) for the promoters to abstain from voting on any resolution seeking removal of an independent director (ID) at the EGMs of the three companies.
Apart from the three companies and Sebi, the four — Janak Mathuradas, Yogesh Mathuradas, Chanda Mathuradas and Pramila Mathuradas — have impleaded the Union ministry of corporate affairs and the ministry of law.
The three Tata companies have called EGMs next week to remove both Wadia and Cyrus Mistry, ousted ex-chairman of Tata Sons, as directors from their boards. A similar petition was filed last week by the shareholders against removal of Mistry.
The petition says IDs have an important role and this is formally recognised in the Companies Act, 2013, and Sebi's Listing Obligations and Disclosure Regulations. “IDs discharge a fiduciary duty towards minority shareholders and stakeholders, and act to protect their interest...(So)... an ID cannot be equated with a non-ID and, thus, cannot be sought to be removed under Section 169 of the Companies Act,” the petition said.
Under Section 169, a director may be removed by an ordinary resolution before the expiry of his term and after given an opportunity of being heard.
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The petition also seeks directions to the two ministries and Sebi for orders to restrain a promoter or promoter group from voting on resolutions concerning IDs; only public shareholders should be so permitted, it asks.
The petitioners say the suit is due to concerted attempts by the promoters here, Tata Sons, through its companies to undermine the role and functioning of IDs on the respective boards.
