Wadia Group chairman and an independent director on boards of various Tata Group companies, Nusli Wadia, has approached the Securities and Exchange Board of India (Sebi), raising issues of breach of corporate governance norms by Tata Sons in matters related to board meetings of various group companies.
The move by Wadia comes even as Cyrus Mistry, who stepped down from the boards of all group listed companies on Monday, vowed to continue his fight with Tata Sons in the courts.
In a letter to Sebi chairman UK Sinha, Wadia cited instances ahead of a Tata Motors board meeting on November 14, where Tata Sons through its legal counsel and solicitors, had attempted to influence independent directors of Tata Motors who were to decide on the ouster of Mistry as chairman.
HT has a copy of the letter.
Recounting the events, Wadia said the company secretary, Hoshang Sethna, circulated an email sent by the legal counsel of Tata Sons, detailing how independent directors should conduct and vote on the issue of removing Mistry as chairman.
Wadia has alleged that this was a “clear case of an external shareholder -Tata Sons -- seeking to illegally influence events and coerce directors.”
However, this has been strongly refuted by the Tatas.
Tata Sons said the legal advisory to the Tata Motors board is in the form of a recommendation, which is typical for all group companies. “The company secretary of Tata Motors has clarified that there was no pressure on him from the legal counsel of Tata Sons to circulate the legal opinions to the board of Tata Motors. He circulated those opinions using his own discretion,” a spokesperson said.
“…Tata Sons had obtained legal opinions from Shardul Amarchanad Mangaldas on the correct legal position of whether independent directors can evaluate the performance of chairman without taking into account views of executive directors and non-executive directors, and whether independent directors can direct the company secretary to communicate their views to the exchanges without the board approving it. Those opinions were forwarded with a very clear message that ‘You may like to place these opinions before your board of directors for their consideration at today’s board meeting. The opinions were not in any way imposing pressure or coercion,” the spokesperson added.
Tata Motors and other group companies had convened EGMs to vote out Mistry and Wadia. With Mistry stepping down, the meetings will now focus on Wadia.