Tata Motors shareholders vote to oust Nusli Wadia from board

Shareholders of Tata Motors have overwhelmingly voted to remove independent director Nusli Wadia from the company board, the second Tata firm to remove him in as many days. While Tata Steel shareholders removed Wadia, Chairman of Britannia Industries, on Wednesday, an extraordinary general meeting of Tata Motors on Thursday saw 71.20% votes polled going against him.

As many as 146.28 crore shares out of 205.45 crore votes polled voted in favour of a resolution brought by the company's main promoter Tata Sons for removing Wadia, who has been accused of siding with the estranged chairman Cyrus P Mistry and rallying independent directors against Tata Sons. Out of 293.8 crore shareholders, 205.45 crore or 69.93% participated in the voting on the resolution, according to a regulatory filing by the company. Those voting against the resolution made up for 28.80% shares.

Out of the promoter group, 99.79% of the 95.27 crore shares voted on the resolution. As many as 3.62 lakh or 0.04% voted against the resolution. Institutional investors were almost equally split on the resolution with 50.06% out of 72.93 crore such shareholders voting in favour of the resolution while 49.94% voted against it. Majority of the public shareholders, which included Mistry's family holding as well, voted against the resolution. 60.62% of 37.44 crore shareholders polled, voted against the resolution. As per the results of the voting the company filed with the exchanges late last night after a marathon extra-ordinary general meeting (EGM), only 99.96% of the promoter votes were cast in favour of the resolution. This means that 0.04% of the promoters shares held by Af-Taab Investment went against the motion. Tata Chemicals and Lady Tata Memorial, which abstained from voting, together own 0.002% of the total voting rights, according to the filings by Tata Motors. Similarly, about 44% of the total non-promoters abstained from voting.

The Tata Power website does not offer any information about Af-Taab Investment, which is listed as the first of its close to 100 subsidiaries and was set up in 1979, while the Lady Tata Memorial Trust is one of the 14 trusts that own Tata Sons and was established by Sir Dorabji Tata in April 1932 in memory of his wife Meherbai, who succumbed leukaemia in June 1931 at the age of 51. When contacted, a Tata Motors spokesperson said he has no comments to offer. On Wednesday, Wadia was removed as independent director from Tata Steel board, which he served for 37 years, with 90.8% of the shareholders present and voting at the company's extraordinary general meeting voting in favour of the resolution moved by Tata Sons seeking his removal.

Wadia did not attend both the meetings, calling them stage-managed. Tata Chemicals is holding an EGM to vote him out after serving the company for over 18 years. Incidentally, it is first time in the history of India Inc that a promoter convenes an EGM to remove an independent director, who normally retires or resigns on their own. Over 60 shareholders, including employees of Tata group like R Venkataramanan, managing trustee of Tata Trusts, and Mehrab Irani, general manager of Tata Investment Corporation, spoke at the EGM of Tata Motors, with only a handful opposing the motion. The EGM also saw some shareholders threatening to sue Wadia for questioning their personal integrity by alleging that all those opposing him are managed by Tata Sons.

In his letter to the shareholders, which was read out in his absence, Wadia said he is not attending the EGM as to remove him as "inappropriately and shamefully stage-managed" by the Tatas. "I have chosen not to attend the meeting as I understand that recent meetings held of other Tata companies have been inappropriately and shamefully stage-managed by the requisitionist (Tata Sons) controlling the entry into the hall, as also in the selection and choice of speakers as never before seen in Indian corporate history," Wadia said. The EGM was attended by hundreds of shareholders and the whole 11-member board, barring Wadia, and was chaired by interim chairman Subodh Bhargava. Ratan Tata sat through the entire over four-hour proceedings amongst the shareholders.

Among the key audience was Ratan Tata and his half-sister Deanna Jejeebhoy. In the letter, Wadia had claimed that he was picked up by the late JRD Tata as an independent director and he has been on the carmaker's board for 18 years. But Ishaat Hussain, a director of Tata Sons, pointed out that it was Ratan Tata who had invited Wadia to Tata Motors board 23 years ago and not JARID. Last week, Wadia had filed a Rs 3,000-crore defamation suit against Ratan Tata, Tata Sons and some of its directors. He filed the case in the Bombay High Court following the move by Tata Sons to remove him from the board of the three companies including Tata Steel, Tata Motors and Tata Chemicals. Wadia had denied allegations by Tata Sons that he was acting in concert with ousted chairman Cyrus Mistry.

Besides, he has refuted claims that he was "galvanising" independent directors and mobilising opinion, forcing disruptions and issuing statements" which were contrary to the interest of the companies as "totally baseless and completely unsubstantiated". The Bombay High Court had last week restrained the Tatas from filling the Wadia post, without its permission at the three companies even if he is voted out by shareholders. The direction came after some shareholders approached the court for a direction to restrain Tata Sons from voting to remove an independent director.