Mumbai, Dec 23 Industrialist Nusli Wadia, an Independent Director of Tata Chemicals, on Friday made an impassioned appeal to the company's shareholders to vote with their "conscience" during the firm's extra-ordinary general meeting (EGM).
Tata Chemicals EGM has been convened on Friday to decide whether or not to remove Wadia as an Independent Director on its Board. The agenda of the EGM was to take shareholders' approval for the removal of Tata Sons' ousted Chairman Cyrus Mistry and Independent Director Wadia from its Board of Directors.
However, on Monday, Mistry had voluntarily stepped down from his position as non-executive Chairman from the Board of Directors of Tata Chemicals. Tata Sons' board ousted Mistry on October 24 and appointed Ratan Tata as the Interim Chairman. Wadia's support for Mistry has led several Tata Group companies to call for their respective EGMs to decide whether or not to remove him from their respective Boards.
"It is in your hands to vote with your conscience for what is right for your company and more important for the institution of Independent Directors," Wadia said in his letter, written on Thursday but made public on Friday. Wadia said he has chosen not to attend the company's EGM, as the recent meetings of other Tata companies have been "inappropriately and shamefully stage managed".
"What is at stake now is not whether I am removed or not but the fate of the very institution of the Independent Director that has been created in law and by SEBI (Securities and Exchange Board of India) to safeguard the interests of all stakeholders," he said. In the letter, Wadia outlined events relating to some key decisions of the Board, such as Tata Chemicals' investment in the Brunner Mond Group of the United Kingdom, and the proposed merger of Hind Lever Chemicals Limited (HLCL) (Haldia Plant) with the company.
"Most important of all is Tata Chemicals' investment in the Brunner Mond Group, in UK, Kenya (Magadi Soda) and the Netherlands at a cost of around Rs 800 crore," Wadia disclosed. The letter elaborated that Wadia, as well as some other Board members, had expressed concern about the fundamental issues involved in the overall arrangement of the deals.
Wadia pointed to large cross-holdings of Tata Chemicals in various listed and unlisted Tata companies. "If these holdings were to be disposed off, your company would be debt- free. These cross-holdings are being maintained in a debt-ridden company only to indirectly keep the voting rights and control of Tata Sons and Tata Trusts," the letter explained.
"Figure across all the listed companies holdings in Tata Sons is approximately 14% of its capital amounting to approximately Rs 70,000 crore," it said. "It is for you, the shareholders of Tata Chemicals, who own 70% of the shares of your company to decide whether you want to be the holder of Tata Sons shares with minimum return, zero liquidity and no exit."