Nusli Wadia, chairman of Wadia group of companies and an independent director on the Tata Steel, Tata Motors and Tata Chemicals boards, sent a defamation notice to Tata Sons saying that its special notice to sack him from the Tata Steel board had lowered his image.
In a special notice to remove him from Tata Steel board, Tata Sons had said Wadia was galvanising other independent directors against the Tata group. In his reply to the notice, Wadia said the allegations in the Tata Sons’ notice were made with the intention of harming his reputation.
“If I was galvanising other independent directors then it casts aspersions on other directors,” Wadia said in the notice. “The resolution was moved with great haste,” he added and asked Tata Sons to withdraw the charges immediately.
When asked about its response to the notice, a Tata Sons spokesperson said: “We will respond to it appropriately.”
Wadia gave two days’ time to Tata Sons to withdraw its special notice, failing which he would initiate civil and criminal proceedings against the Tata Sons board, said the notice.
This is the first legal challenge to the notice sent by the Tatas to remove Wadia and former chairman of Tata Sons Cyrus Mistry from the boards of Tata companies as a director.
“Tatas have embarked on a personal vendetta against me,” said Wadia’s notice to Tata Sons.
In the board meetings held earlier this month, Wadia had come out in full support of Mistry. Wadia, who is a senior independent director on the three companies and the chairman of the Nomination and Remuneration Committee of all the three companies, had given a good report on Mistry and was reportedly unhappy with the way Mistry was removed on October 24 by the Tata Sons board.
The friendship between Wadia and Ratan Tata developed cracks after the latter went on an overseas acquisition drive of Tata Steel that resulted in a huge loss to the company. Wadia had also shot down a proposal by Tata Chemicals to buy an overseas company and was against the Nano project that resulted in Tata Motors losing over Rs 25,000 crore in development costs.
Tata Sons’ notice on November 11 by Chief Operating Officer and Company Secretary F N Subedar said Wadia was acting in concert with Mistry and was against the interests of the Tata group.
“Despite purportedly being an independent director on the boards of certain Tata group of companies including in Tata Steel, Wadia has been conducting himself as an interested party. Wadia has been conducting himself in a manner that is designed to cause harm to the Tata group,” said the Tata Steel notice.
“He has not been conducting himself independently and instead has been galvanising independent directors and acting prejudicially. Wadia’s action may put the company in grave jeopardy and impact the overall morale of the workers, employees and management who have joined a Tata company. Moreover, he has been a director since several decades and considering all these factors, his continuance on the board is untenable. The principal shareholders have lost confidence in the independence suitability or bonafides of Wadia and seek his removal,” the notice said.
Source: Business Standards