Withdraw notice or face legal action: Nusli Wadia to Tata

Nusli Wadia, independent director (ID) on the board of Tata Steel, Tata Chemicals and Tata Motors, has warned holding company Tata Sons to withdraw the special notice to remove him from the Tata Steel board.

He said Tata Sons had failed to prove, among other allegations, that he’d galvanised other IDs against the Tatas or had acted against Tatas’ interests.
Responding to Tata Sons’ letter in this regard, Wadia said: “Whilst your allegation that as 'requisitionist’ (of a shareholder meeting), the directors of Tata Sons and F N Subedar (company secretary and COO of Tata Sons) are not required to give any reasons, maybe true, the fact, however, remains that the directors of Tata Sons and Subedar have nevertheless opted to give reasons for seeking my removal as an independent director. It cannot be gain said that the fact a requisitionist chooses to supply reasons for removal of an independent director, such reasons can never be per se false, malicious, defamatory and libellous.” 
Wadia’s reply was addressed to Bharat Vasani, who has been authorised by all Tata Sons directors (except Cyrus Mistry and Farida Khambata) to respond to Wadia’s letters.
A Tata Sons spokesperson said the company would respond appropriately to Wadia’s letter.

Wadia had sent a defamation notice to Tata Sons directors on November 21, after Tata Sons alleged in a special notice dated November 11 that Wadia was “acting in concert” with ousted Tata Sons chairman Cyrus Mistry, and was “acting against the interests” of the Tata group, and as an interested party. In the notice requesting for an extraordinary general meeting (EGM) to remove Wadia from the Tata Steel board, Tata Sons had also alleged that Wadia was not conducting himself independently and instead been galvanising the IDs and acting prejudicially. 

Tata Sons had sent similar special notices requesting EGMs for Wadia’s removal from the Tata Chemicals and Tata Motors boards.

In his letter to Tata Sons and its board members, Wadia sought proof that he was acting in concert with Mistry, and not acting independently. He also asked the Tatas to prove he was galvanising other IDs or had deviated from his fiduciary duty as an ID. In its reply dated November 24 to Wadia’s notice, Tata Sons said there was nothing vindictive in its special notice to remove him from the board and the notice  was “not intended to lower” his reputation or defame him but “instead to take appropriate action in accordance with law”, Press Trust of India reported on Tuesday.

Wadia’s reply on Wednesday said a licence to requisition a meeting is not a licence to defame. “More so when the reasons supplied are mandatorily required to be published, not only for the benefit of the general body of shareholders to enable them to exercise their vote at the EGM but also to enable the IDs concerned to make representations thereto, which if made are also required to be placed before the general body of shareholders.”

“You have conveniently failed to substantiate and/or submit any proof, furnish any evidence, not a single document or information as called upon by me, which would even remotely show, much less prove, the allegations that have been made against me in the special notice by the directors of Tata Sons, and Subedar. This fortifies my belief beyond doubt that the publication of the said imputations and allegations against me are false, baseless, defamatory and libellous, and have been made by directors of Tata Sons and Subedar with a common intention to tarnish my image and harming my reputation,” Wadia said.

“As far as my fiduciary duties are concerned, on the one hand you seek to assert that you do not wish to advise me on the same and on the other hand, do not agree that they are limited to Tata Steel alone, without specifying what they are. Your comment that they are not limited to Tata Steel alone is incorrect and inappropriate. I reiterate that the independent directors do not owe any fiduciary duties to Tata Sons alone. In any event, I do not owe my fiduciary duty to the undefined Tata group or Tata companies. The fiduciary duty of an independent director is to all stakeholders of the company of which he is an independent director,” Wadia said. 

The directors of Tata Sons and Subedar had embarked on a personal vendetta against him for discharging his duties as an independent director, Wadia wrote in the letter. 

He added he had great respect for the late J R D Tata and was shocked that one of Ratan Tata’s first acts as interim chairman of the board of Tata Sons was to move a resolution to seek his removal as an ID, based on ‘deliberate and malicious allegations’. “In fact, it is Ratan Tata who has failed to live up to the high standards of ethics, morality, and corporate governance set by J R D Tata,” Wadia said, in a warning to Tata Sons to withdraw the special notice or face civil and criminal proceedings for defamation. 

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel