Nusli Wadia, who had previously been removed as an independent director of the company, reportedly, filed a defamation case against the Tatas, seeking a damage of Rs 3,000 crore.
Amid ongoing rift within the Tata group borad, started from the replacement of Cyrus Mistry as the chairman of the Tata Sons group, Nusli Wadia, who had previously been removed as an independent director of the company, reportedly, filed a defamation case against the Tatas, seeking a damage of Rs 3,000 crore. The ousted industrialist, in a media statement, claimed that the reason behind his removal as the director was his independence of mind and action.
Earlier in the day, Wadia claimed that the continued investments by Tata Chemicals in under-performing overseas business incurring substantial losses, specially in the UK, have led to destruction of shareholder value with net debt of the firm rising to Rs 8,695 crore in the last 10 years.
Facing a shareholders’ vote on December 23 after Tata Sons moved a resolution to remove him as an independent director of Tata Chemicals, Wadia also said the series of allegations against him were “totally false and baseless”.
“I had raised my serious concerns over the years for providing continuing financial resources of the company towards the overseas business and assets, which were continuously under performing and incurring substantial losses,” he wrote in a letter to the shareholders of the company.
Highlighting the 2005 acquisition of Brunner Mond Group, he said, “I as well as some other board members expressed serious apprehensions on the proposal for the acquisition of Brunner Mond Group, having soda ash business operations in UK, Kenya (Magadi Soda) and the Netherlands at a cost of around Rs 800 crore for sound reasons.”
However, decision was ultimately taken by consensus, he added.
“Unfortunately shortly after the acquisition the profitability became negative and continued to remain so… This has now led to an impairment on this acquisition of approximately Rs 1,600 crore,” Wadia wrote.
Highlighting flaws in the inorganic expansion approach of the company, Wadia said: “During the last ten years mainly due to various acquisitions, the consolidated debt of your company went up from Rs 1,827 crore to Rs 8,695 crore, an increase of Rs 6,800 crore.”
(With inputs from PTI)