Long-time friend and ally of the Tatas, Nusli Wadia, stayed away from the extraordinary general meeting (EGM) of Tata Steel on Wednesday where shareholders voted on a resolution to remove him as independent director.
Long-time friend and ally of the Tatas, Nusli Wadia, stayed away from the extraordinary general meeting (EGM) of Tata Steel on Wednesday where shareholders voted on a resolution to remove him as independent director. In a statement, read out at the meeting, Wadia alleged Tata Sons was stage-managing the EGMs by restricting the entry of dissenters and allowing only selected persons to speak. As such, he said, he did not want to be present at the meeting.
While the EGM had been called to vote on removing Cyrus Mistry as director, this was not necessary since Mistry resigned from the board on Monday. Mistry was ousted as chairman of Tata Sons on October 24 following which there have been acrimonious exchanges between Mistry and Tata Sons.
After resigning from the boards of six companies on Monday, Mistry, on Tuesday, moved the National Company Law Tribunal (NCLT) seeking protection against mismanagement by Tata Sons and oppression of minority shareholders.
In contrast to the EGM of Tata Consultancy Services (TCS) held last week, where several shareholders rooted for Mistry and spoke against the Tatas, the EGM of Tata Steel saw most shareholders —many of them employees from the plant at Jamshedpur—eulogising the Tatas.
BB Nankani, a shareholder of Tata Steel since the late 1980s, told FE the meeting “resembles political parties bringing in paid cheerleaders to their rallies”. “My money has gone down the drain because of Ratan Tata’s decision to acquire Corus,” Nankani said.
While about 56.7% of institutional shareholders exercised their vote at the TCS EGM, approximately 42.5% of them voted in favour of Mistry. A very small fraction of small shareholders, just 17.7%, voted.
Ishaat Hussain, director, Tata Steel, said at the meeting the decision to acquire Corus in 2007 had been unanimous with all board members of Tata Steel, including Wadia, approving the deal. He was responding to observations by Wadia that the R75,000-crore capital employed in Tata Steel Europe, over the years could have been invested in three steel plants across India with substantial returns. That, Wadia said, would have made Tata Steel the number one steel company while providing employment to a million Indians. Hussain said such statements indicated Wadia was acting in concert with Mistry against the interest of the Tata Group. Wadia’s statement also noted that recent public statements that have been made on Tata Steel Europe (formerly Corus) just to protect 11,000 British jobs is a matter of concern that needs to be addressed by all shareholders as such support has now become unaffordable and is detrimental to the interest of the shareholders.
For most parts, the Tata Steel EGM, chaired by interim chairman OP Bhatt, who replaced Cyrus Mistry as the company’s chairman on November 25, was a repeat of the Indian Hotels Company (IHCL) EGM on Tuesday. There were a few half-hearted attempts at questioning the company’s board with most shareholders speaking in praise of Ratan Tata or calling for a truce with Mistry. “I have to say that whether Corus was purchased at half price or double the price, it is certain you have overpaid for it,” Umesh Shah, a rare voice at the EGM, said. Shah said he was saddened by the fight between the Tatas, the Mistrys and the Wadias, who he considered the founders of Bombay.
The results of the voting were not out till the time of going to press. On Thursday, shareholders of Tata Motors will vote on the removal of Nusli Wadia from the company’s board.