Tata Sons Ltd on Friday sought to remove Nusli Wadia from the board of the $103-billion conglomerate’s auto, steel and chemicals units after the well-known industrialist supported ousted group chairman Cyrus Mistry.
The Ratan Tata-controlled group holding firm has sent notices to Tata Motors Ltd, Tata Steel Ltd and Tata Chemicals Ltd to convene meetings of their respective shareholders to remove Wadia and Mistry from the boards, the three companies said in separate stock-exchange filings.
Tata Sons had fired Mistry as its chairman last month and named his predecessor Ratan Tata as interim chief. It has now stepped up the offensive against Mistry and those seen supporting him.
On Thursday, in a nine-page statement, Tata Sons accused Mistry of betraying the trust reposed in him and of adopting “devious moves” to take control of the main operating companies of the group.
Mistry has termed his sacking illegal and has been digging in his heels for a prolonged fight. He remains the chairman of several Tata group companies including Indian Hotels Co, Tata Steel, Tata Motors, Tata Power Company, Tata Global Beverages Ltd, Tata Chemicals, Tata Industries Ltd and Tata Teleservices Ltd.
Also on Thursday, Tata Sons had removed Mistry from the chairman’s post at Tata Consultancy Services Ltd, the group’s cash cow in which it holds a majority stake, and called for a meeting of shareholders of TCS to oust him from the board as well. It has also sought a meeting of the shareholders of Indian Hotels, the group’s hospitality arm, to remove Mistry.
But Tata Sons doesn’t hold a majority stake in many group companies, including Indian Hotels and Tata Chemicals, and will therefore find it more difficult to remove Mistry than in the case of TCS. Tata Sons holds a 28.01% stake in Indian Hotels, 26.51% in Tata Motors—owner of the Jaguar and Land Rover luxury UK brands—and 29.75% in Tata Steel.
The move to target Wadia came a day after he joined other independent directors at Tata Chemicals in expressing their confidence in Mistry. However, Bhaskar Bhat, a non-executive and non-independent director at Tata Chemicals, quit the company’s board to protest the independent directors’ move. Bhat is also managing director at Titan Co., the group’s watch and jewellery arm.
Wadia, who is also a Parsi like Ratan Tata and Mistry, heads the Wadia Group that includes companies such as textiles firm Bombay Dyeing, budget carrier GoAir and food products maker Britannia Industries Ltd. He is a grandson of Pakistan’s founder Muhammad Ali Jinnah.
Tata Sons’ latest move indicates it could now go after other individuals who support Mistry. Last week, independent directors of Indian Hotels, including noted banker Deepak Parekh, had also supported.
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