Companies

Investors move court to block Wadia’s ouster

Our Bureau Mumbai | Updated on January 27, 2018 Published on December 14, 2016

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Shareholders in Tata Group firms want promoters to abstain from vote



As the power tussle within the Tata Group intensifies, investors in the group companies are stepping up to have their voice heard and to steer the course of events.

On Wednesday, Tata Group companies investors moved the Bombay High Court seeking a direction to the promoters – Tata Sons and Tata Trust – to abstain from voting on the resolution to remove independent director Nusli Wadia from the board of Tata Steel, Tata Motors and Tata Chemicals.

Protecting small investors

In the writ petition, the investors said Wadia was being removed from the board because he was acting against the promoters and looking to protect the interests of minority shareholders.

The case was filed against the Secretary, Ministry of Corporate Affairs, Ministry of Law & Justice, SEBI, the promoters of Tata Chemicals, Tata Motors and Tata Steel. It was mentioned before Justice Kathawalla on Wednesday and will come up for hearing on December 16. An independent director cannot be equated with a non-independent director and cannot therefore be removed under Section 169 of the Companies Act, 2013, the petition said.

The investors sought the immediate intervention of the court because, the petition said, the promoters “are trying to undermine” the role and functioning of independent directors appointed to the companies’ board.

The identical notices issued by the promoters to secure Wadia’s removal from the board of three Tata Group companies had raised concern and “undermines the role and functioning of independent directors” on listed companies, the petitioners said.

The development also raises “far-reaching issues” relating to good corporate governance and questions the statutory protection given to small investors through their representation on the board through independent directors, the petition said.

Plea to suspend voting

The petitioners also sought the court’s direction to hold back a vote on the resolution to remove Wadia until the final judgement is delivered in the case.

Published on December 14, 2016
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