Ness Wadia should step down on moral grounds: Proxy advisory firms

Ness Wadia, the scion of multi-billion dollar conglomerate Wadia Group, should take a “moral responsibility” and step down from his position as a Director from the listed companies, according to proxy advisory firms.

Wadia, who was sentenced to two years of imprisonment by a Japanese court in March for possession of drugs, is on the board of four listed Wadia group companies — the Bombay Burmah, Britannia, Bombay Dyeing and the National Peroxide.

Leading proxy advisory firms such as the SES and the InGovern said that Ness Wadia’s “conduct” and “character” is the reflection of that of the Board and hence, either the board should take ‘suo moto’ action or Wadia should step down on ‘moral grounds’.

“We do not know about the actual order of the Japan court nor the laws of the suspended sentence, and what arrangements India and Japan have. But Ness Wadia is on the wrong side of the law and morally he has to step down,” said J N Gupta, Founder of Proxy Advisory firm SES. InGovern’s founder Shriram Subramanian, told BusinessLine that the board is responsible for ensuring that shareholders’ interests are protected and that it is imperative for a good listed company to take proactive action in such situations.

Wadia Group did not respond to an email query send by BusinessLine in this regard.

The proxy advisory firms were reacting to a statement by the Wadia Group which stated that Ness Wadia’s arrest will not impact his role as a Director of the group companies.

“Ness is in India. The judgement is clear. It is a suspended sentence. Hence, it will not impact Ness Wadia in the discharge of any of his responsibilities and he will continue to play the role that he has done hitherto, both within the Group and outside,” said the spokesperson.

Wadia Group’s FMCG company Britannia Industries has sought legal opinion on the role of Ness Wadia as a director following his arrest, according to a report.

Chairman Nusli Wadia has presented before the board the opinion of the country’s top jurist Fali S Nariman who had endorsed Ness staying on as Director.

With the insistence of the independent board members seeking external legal opinion, the Britannia Industries’ board has reportedly turned to the retired chief justice of Supreme Court, TS Thakur, for opinion over the issue.

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