All eyes are on the Tata Steel board meeting to approve fiscal second quarter earnings. But financial performance of the steelmaker would be second priority.
The opinion of independent directors on the board of Tata Steel is crucial and it will be widely followed to see whether they too, as in the case of Tata Chemicals and Indian Hotels, will come out in support of ousted Tata Sons chairman Cyrus Mistry. Mistry continues to be chairman of Tata Steel.
The independent directors of Tata Steel include industrialist Nusli Wadia, Eicher group chairman emeritus Subodh Bhargava, former SBI chairman O P Bhatt, TAFE chair Mallika Srinivasan, professional Andrew Robb and global steel industry veteran Jacobus Schraven.
There are already reports that Tata Sons has sought the ouster of independent director and Bombay Dyeing chairman Nusli Wadia from the board of Tata Steel. This could not be however confirmed.
“It will be important to see what Nusli has to say at the board meeting. He has always been a fearless professional and speaks his mind. In fact at most board meetings it is Nusli who does the talking. He also does his homework thoroughly,” said a person who has worked with Wadia for a long time.
Incidentally, Wadia is also an independent director on Tata Chemicals and had participated in the statement of support issued in favour of Mistry.
Wadia is said to be close and enjoys a good rapport with Tata Steel group executive director (finance) Koushik Chatterjee. “So it will probably be difficult for Nusli to go against the company as most issues that Tata Steel is currently facing, are purely finance in nature,” said the person cited earlier.
Tata Steel Europe has been a big drag on the steelmaker’s consolidated financials and a plan to sell the European business has been in the works. Resolving a GBP 15 billion pension scheme in the UK, that has seen a deficit of GBP 700 million is priority for the company. International media reports suggest that Tata Steel UK is planning to close down the pension scheme. This too could not be confirmed.
The steelmaker has also been facing issues due to the slowdown in the steel industry globally and due to the fact that its overseas steel operations have to rely on market supply of iron ore, the key raw material. In India, Tata Steel has captive iron ore mines which has enabled it to weather fluctuations in ore prices and supplies.
Earlier, Tata Chemicals said Bhaskar Bhat, a non-executive and non-independent director of Tata Chemicals, has resigned from the company board citing differences of opinion. Bhat, who is also managing director of Tata group company Titan, stepped down from Tata Chemicals board with immediate effect.