1. Ratan Tata vs Cyrus Mistry: Proxy advisory firm revises recommendation after Nusli Wadia suit

Ratan Tata vs Cyrus Mistry: Proxy advisory firm revises recommendation after Nusli Wadia suit

Revising its recommendation, proxy advisory firm Institutional Investor Advisory Services (IiAS) has supported removal of independent director Nusli Wadia from board of Tata Motors and Tata Steel, saying it was in the long-term interest of Tata Group.

By: | New Delhi | Published: December 18, 2016 4:36 PM
tata-l-pti The change in recommendation follows the recent Rs 3000 crore defamation case filed by Nusli Wadia against the Tatas. (Source: PTI)

Revising its recommendation, proxy advisory firm Institutional Investor Advisory Services (IiAS) has supported removal of independent director Nusli Wadia from board of Tata Motors and Tata Steel, saying it was in the long-term interest of Tata Group.

IiAS, which supports removal of estranged Chairman Cyrus Mistry from Tata Group firms, “changed its voting recommendation on the resolution to remove Nusli Wadia from Tata Steel and Tata Motors – we support the resolution,” it said in a report.

The change in recommendation follows the recent Rs 3000 crore defamation case filed by Nusli Wadia against the Tatas.

“Given this, we believe the relationship between Nusli Wadia and the Tatas has become antagonistic and will therefore likely be a distraction for the boards,” it said.

The lawsuit, and the amounts demanded as reparations, is significant evidence to suggest that Nusli Wadia’s presence in the boardroom is likely to be a distraction, it said.

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IiAS had previously recommended that shareholders vote against the removal of Nusli Wadia as a director.

Nusli Wadia’s support for Cyrus Mistry is purportedly causing harm to the interests of the Tata Group. But no evidence is provided to support this claim.

“Given recent developments, IiAS now changes its voting recommendation to support the resolution – it is in the long-term interest of the Tata companies to remove Nusli Wadia as a director,” it said.

IiAS said its previous recommendation in support of Nusli Wadia emanated from a larger governance question – can Tata Sons, as the controlling shareholder, ask for the removal of an ‘independent’ director on account of his support to Cyrus Mistry?

Tata Sons accused Nusli Wadia of being disruptive and galvanizing other independent directors to act against the interests of the Tata group.

While Nusli Wadia has been vocal in his views, there was no tangible evidence of his ‘contrarian’ views being detrimental to the interest of Tata companies or the group in general.

  1. Koickaleth Varghese
    Dec 19, 2016 at 9:36 am
    Nusli Wadia's intention is to try for Britannia like take over of Tata Group companies with Cyrus. There sermons on corporate governing transparency is like devil quoting scriptures. What is the transparency and independent directors in Wadia group companies. Also when conflict of business interest come with his own airline and Tatas he should have resigned on that principle instead of supporting Cyrus against Tatas foray into Airline business. Air India came from Tata's family, their pion to have airline interest cannot be considered as disruptive as Tatas run Air India profitably prior to its nationalisation. Now the cat is out from Mr. Wadia bag with the compensation claim.
    Reply
    1. Rupal Tyagi
      Dec 29, 2016 at 10:39 am
      Truthy Half told is as dangerous as a lie. IiAS might have supported the resolution to remove Nusli Wadia from the board in better interests of Tata Sons, but his defamation filling against the organisation has a long-drawn history of event which has clearly been ignored here. And if only they had cared about the organisation's interest, how logical it was to fire Cyrus Mistry when there was no trace of him no working towards Tata Sons' progress?
      Reply

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