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The Tata Group tussle is far from over.
Nusli Wadia, Chairman of the Wadia Group and independent director on three Tata Group companies, is holding his ground on the corporate governance issues in Tata companies even as the shareholders of Tata Steel, Tata Motors and Tata Chemicals vote on a resolution moved by Tata Sons to ease him out as independent director at the three EGMs to be held over Wednesday and Thursday.
Cyrus Mistry, former chairman of Tata Sons, who has been in a pitched battle with Ratan Tata over governance issues, decided to quit as the director of six group companies on Monday.
Cohesive actionQuitting as director of all the listed companies, Mistry said he will take the fight to court, as the cohesive action taken by the Tatas against various stakeholders is making him uneasy.
Even while facing the shareholders’ test at the EGMs, Wadia has moved market regulator SEBI to investigate alleged sharing of price-sensitive information on Tata Steel, Tata Motors and Tata Chemicals by Ratan Tata, Noshir Soonawala and the board members of Tata Sons, leading to violation of the Insider Trading Regulation Act.
It marks a rare instance of an independent director taking a company issue to the regulator.
As per the Act, information can be shared with the approval of the board of directors on a case-by-case basis.
Despite the counsel’s advise, Wadia said, no board resolution was passed in companies where he was present as director.
He has urged SEBI to investigate the issue in the larger interest of investor protection.
Tata Sons has accused Wadia of “acting in concert with Mistry” and sought his expulsion as an independent director from all the three firms. Taking strong objection, Wadia filed a ₹3,000-crore defamation suit against Tata Sons interim chairman Ratan Tata and the board of directors of Tata Sons, on December 16.
Proxy advisory firm Stakeholder Empowerment Services said the issues raised by Mistry and Wadia must be investigated by a third party independent investigator and “truth be told to shareholders”.
If any of the issues are found to be correct, not only should corrective action be taken so that it does not happen in future, but also those found guilty of past actions must be punished in accordance with the law, it said.
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