Nusli Wadia calls upon the shareholders to exercise their rights | business-news | Hindustan Times
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Nusli Wadia calls upon the shareholders to exercise their rights

Wadia group chairman Nusli Wadia, who is an independent director on the board of Tata Motors, has alleged that the commercial vehicle maker, one of the two most profitable companies of the Tata group, has to maintain large cross holdings in various group companies only to allow parent company Tata Sons to enjoy voting rights and control.

business Updated: Dec 14, 2016 13:00 IST
HT Correspondent
Nusli Wadia had on Dec 13 written a similar letter to shareholders of Tata Steel, explaining his stand to contest the decision of the company board to oust him as director there too.
Nusli Wadia had on Dec 13 written a similar letter to shareholders of Tata Steel, explaining his stand to contest the decision of the company board to oust him as director there too.(PTI)

Wadia group chairman Nusli Wadia, who is an independent director on the board of Tata Motors, has alleged that the commercial vehicle maker, one of the two most profitable companies of the Tata group, has to maintain large cross holdings in various group companies only to allow parent company Tata Sons to enjoy voting rights and control.

Wadia has made these charges in a 13-page letter that he wrote to the shareholders of Tata Motors on Wednesday, ahead of the Dec 22 extraordinary general meeting of the company, that has been called to vote out Wadia as director.

Wadia had on Dec 13 written a similar letter to shareholders of Tata Steel, explaining his stand to contest the decision of the company board to oust him as director there too.

“On the one hand Tata Motors is burdened with heavy debt and has a substantial funding requirement for its future strategy. On the other hand Tata Motors has large cross holdings in various Tata companies including non listed companies Tata Sons, Tata Projects, Tata Industries, Tata Services, Tata International and Tata Capital and listed companies like Tata Chemicals and Tata Steel.

“The value of the unlisted shares is approximately Rs 8,600 crores. The current value of the listed shares is in excess of Rs 200 crores making a total of around Rs 8,800 crores. These cross holdings are being maintained in a debt-ridden company only to indirectly keep the voting rights and control in Tata Sons,” said Wadia.

Incidentally, Tata Motors on Dec 14 filed a caveat against Wadia and former group chairman Cyrus Mistry, the Bombay High Court, to ensure that there are no ex-parte orders – rulings done on or for the application of one party alone.

The EGMs have been called to remove Mistry also as director.

So far, Tata Sons has not commented on Wadia’s letter to the shareholders of Tata Motors.

Wadia called upon the shareholders to exercise their rights. “It is for you shareholders who own around 70% of the company, to decide as to whether it is in your best interest to hold the shares worth Rs 8,800 crores with no return or to disinvest, and pay off an equivalent debt and save interest of approximately Rs 800 crore, thereby improving the profit of the company by the same amount.”