Industrialist Nusli Wadia, who faces eviction from the board of Tata Steel as Independent Director, has urged the company’s shareholders to ‘vote with their conscience and for what is right for the company and the institution of Independent Director.’
Tata Sons, the promoter of Tata Steel, has asked the company to call an Extraordinary General Meeting (EGM) to remove Cyrus Mistry and Mr. Wadia as directors from the company. The EGM is on December 21. Tata Sons has alleged that Mr Wadia had been acting in concert with Mr. Mistry and that their actions had harmed the interests of the Tata Group.
Mr. Wadia had earlier denied the allegations as ‘unsubstantiated, baseless and defamatory’ and is contesting the charges.
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‘Saving British steel’
In a 15-page representation to Tata Steel shareholders, Mr. Wadia said that any return on investment in Tata Steel Europe looked a near-impossibility. “Shareholders have already suffered serious impairment of close to Rs.35,000 crore and will have further substantial impairments in the near future. The total capital employed now on account of Tata Steel Europe is in the region of Rs.75,000 crore.”
He added: “It is ironical that the founder Jamshedji Tata started Tata Steel to fight British Steel and now Ratan Tata is trying to save British steel (referring to Corus / Tata Steel Europe) by deploying huge resources at the cost of Tata Steel India.”
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He also said, “It is for the first time in the history of corporate India that a promoter is using his muscle power with false and vindictive allegations to remove an independent director.”
‘Against tenets’
“Under such circumstances, Independent Directors are left with two options - either to resign or face removal or to be forced to defend their integrity before the shareholders at their own expense. It is for you to decide if such coercive tactics must be condemned in the strongest terms as they fly in the face of the basic tenets of corporate governance,” Mr. Wadia said in the representation.
“Your vote will therefore be a significant signal to all other companies, promoters, public shareholders as well as Independent Directors,” he added.
According to Mr. Wadia, “Although it is my removal that you are being asked to vote upon, the real ‘person’ on trial is the ‘institution of Independent Director’ itself and not me.
“Your vote 1will have implications not only on how the other Independent Directors are to be treated but on all Independent Directors of all companies across the country.”
He added, “I am here before you because I chose to discharge my duty as an Independent Director honestly.
“I did not toe the line of one particular shareholder. My independent stand has aggravated Tata Sons and my removal is being sought because “I chose not to follow their diktat. My fiduciary duty is to your company and not to an unidentified Tata Group,” he said.