Minority shareholders at three Tata companies move Bombay High Court against Nusli Wadia's removal
The three firms – Tata Chemicals, Tata Motors and Tata Steel – have called meetings next week to remove Wadia and Cyrus Mistry as directors.
Four minority shareholders at Tata Chemicals, Tata Motors and Tata Steel on Wednesday moved the Bombay High Court against the special notice issued by the firms calling for the removal of Nusli Wadia as independent director. The shareholders – Janak Mathuradas, Yogesh Mathuradas, Chanda Mathuradas and Pramila Mathuradas – have asked the court to prevent the companies’ promoters from voting on any resolution seeking the removal of an independent director, Business Standard reported.
The petition filed with the high court said that independent directors had an important role in the functioning of a company, and that such a role had been formally recognised in the Companies Act, 2013. “Independent directors discharge a fiduciary duty towards minority shareholders and stakeholders and act to protect their interests,” it said.
The plea has also asked the court to direct the Securities and Exchange Board of India as well as the ministries of law and corporate affairs to restrain promoters from voting on resolutions concerning independent directors. The filing of the petition comes ahead of next week’s extraordinary general meetings called by the companies to remove Wadia and ousted Tata Sons chairperson Cyrus Mistry from their boards.
The decision to removed the two from the boards of the three companies was made on November 11, following a Tata Chemicals’ board meeting, at which Wadia and a few other independent directors supported Mistry as the chairman of the board. However, Wadia said Tata Sons had ousted him from companies under the group for his independence of “mind and action”. “Allegations levelled against me by Tata Sons that I have been acting in concert with Cyrus Mistry are totally false and baseless,” he said.
On November 21, Wadia had served a defamation notice to the conglomerate, asking the group to either withdraw its “defamatory special notice” or prove the accusations within two days of receipt of the letter. As an alternative, he had suggested that the board appoint an independent retired judge to study the allegations, which if proven wrong would have him continue as independent director. The latest developments come amid the spat between Mistry and Tata Sons. Mistry was ousted as chairman of Tata Sons on October 24.