Wadia group chairman and an independent director on board of various Tata companies, Nusli Wadia, has asked shareholders of Tata Steel to collectively seek the intervention of both the central government and market regulator SEBI to protect the institution of independent directors.
Wadia, who is an independent director on board of Tata Steel, said this in his representation to the company shareholders ahead of an extraordinary general meeting (EGM) called on Dec 21, to remove him.
The Tata Steel EGM will also vote on removing former group chairman Cyrus Mistry as director. Mistry has already been replaced as chairman of Tata Steel by O P Bhatt, former chairman of SBI.
On Dec 12, Tata Industries had also removed Mistry as the director after voting by shareholders.
In the representation sent late on Dec 12, Wadia, a veteran industrialist and an independent director with the Tatas for 37 years, said that the removal of an independent director “stands on a much a higher pedestal than a mere transaction since an independent director is the guardian and custodian of all stakeholders.”
The Tatas have sought to remove Wadia as independent director alleging that he has been acting against the interests of the company and that he has also been acting in concert with Mistry, who the Tatas had removed as group chairman.
Calling for a uniform application of corporate norms, Wadia said that if the voting rights of promoters or interested parties are restricted in case of related party transactions or a merger of a listed company, “then there is no reason why the same principle should not apply to removal of independent directors as well.” The ability of a promoter to remove an independent director through an ordinary resolution on which it can vote therefore represents a major dichotomy and contradiction that needs to be addressed urgently, he added.
While SEBI has not made a formal statement on the issue so far, reports have suggested that the market regulator has been closely monitoring developments in the boardroom battle at the Tatas, as the two sides have alleged breach of governance norms by each side.
Tata Consultancy Services, the crown jewel in the salt-to-software Tata Group, will hold its EGM, where a resolution to remove Mistry as the director will be put to vote.
If you like our work, then don’t forget to like our facebook page.