Mumbai: Industrialist Nusli Wadia, an Independent Director of Tata Motors, has asked the shareholders of the automobile major to vote with their “conscience” during the company’s extra-ordinary general meeting (EGM) on Thursday. Tata Motors has convened an EGM to decide whether or not to remove Wadia as an Independent Director on its Board.
The agenda of the EGM was to take shareholders’ approval for the removal of Tata Sons ousted Chairman Cyrus Mistry and Independent Director Wadia from its Board of Directors. However, on Monday, Mistry had voluntarily stepped down from his position as non-executive Chairman from the Board of Directors of Tata Motors.
Tata Sons board had ousted Mistry on October 24 and appointed Ratan Tata as the Interim Chairman. “It is in your hands to vote with your conscience for what is right for your company and more important for the institution of independent directors,” Wadia said in his letter, dated Wednesday but made public on Thursday. He also said he has chosen not to attend the company’s EGM on Thursday as the meetings of other Tata companies have been “inappropriately and shamefully stage managed”.
“What is at stake now is not whether I am removed or not but the fate of the very institution of the Independent Director that has been created in law and by SEBI (Securities and Exchange Board of India) to safeguard the interests of all stakeholders,” he added.
The ability of a promoter to remove an Independent Director through the brute force of its holding in an ordinary resolution on which it can vote is a serious and major dichotomy and contradiction that needs to be and must be addressed urgently, Wadia said.
“I have forwarded this letter to the company secretary to read it out to you, my dear shareholders. It is for him and the Board to decide whether they wish to allow him (Ratan Tata) to do so,” he added. On Dec 13, Tata Sons had hiked its stake in Tata Motors buying five crore shares worth Rs 486.13 per share.
At the end of the last quarter on September 30, Tata Sons held 26.98 per cent stake in the company, while the complete promoter group had a holding of 33.01 per cent in Tata Motors. On the other hand, Wadia had approached the Bombay High Court. On December 16, the Bombay High Court declined relief to minority shareholders of three Tata Group companies seeking to restrain promoters from voting at EGMs between December 21-23 on a resolution to remove Wadia as an Independent Director.
However, the Bombay High Court has barred Tata Steel, Tata Motors and Tata Chemicals from filling up the vacancy on the Board of Directors till further orders in the matter. Wadia’s support for Tata Sons’ ousted Chairman Mistry has led several Tata Group companies to call for their respective EGMs to decide whether or not to remove Wadia from their respective Boards. The development comes a day after Wadia was removed from Tata Steel’s Board of Directors. On Wednesday, over 90 per cent shareholders of Tata Steel voted to remove Wadia as an Independent Director of the company during its EGM.
