Nusli Wadia, Non-Executive, Independent Director, Tata Motors Photo: Kamlesh Pednekar
Shareholders of Tata Motors gathered today to vote on the resolution seeking the removal of the company’s independent director Nusli Wadia at the extraordinary general meeting, a day after over 90% voted in favour of his ouster from Tata Steel.
Outcome of the voting, which went on till late evening on Thursday, is not known as yet. Tata Sons, the promoter shareholder of Tata Motors, holds 26.51% is in the company.
The company did not seek voting on the resolution for the removal of Cyrus Mistry, the former Chairman of Tata Sons and also of Tata Motors since he had already tendered his resignation on Monday. Subodh Bhargava, independent director of Tata Motors was the chairman of the extraordinary meeting held today.
An overwhelming number of shareholders at the EGM seemed to have voted in favour of the resolution as several such shareholders were seen eager to propose the resolution with an equal number to second it after Bhargava called out at the start of the proceedings.
Like the EGM of Tata Steel held on Wednesday Wadia chose not to attend today’s Tata Motors EGM, which was held at the Yashwantrao Chavan Auditorium in South Mumbai. He however sent a letter to the board asking it to be read out before the shareholders before the meeting began.
Wadia, in his letter, accused the Tata group of stage managing the entire voting process, drawing ire of shareholders. “I have chosen not to attend the meeting as I understand that recent meetings held of other Tata companies have been inappropriately and shamefully stage managed by the requisitionist controlling the entry into the hall as also the selection and choice of speakers as never before seen in Indian corporate history," Wadia claimed.
This accusation drew the ire of several of Tata loyalist with many challenging Wadia to come and face the shareholders instead of writing such letters. “ I came from Hyderabad for this EGM leaving my mother who is in the ICU. Does this look like it is stage managed?”, asked Arun Kumar, a Tata Motors shareholder.
From the Tata Sons camp it was the group’s old hand Ishaat Hussain who chose to respond to Wadia’s accusations.
“I stand before you as a representative of Tata Sons. In Tata Sons view subsequent to the development of October 24, 2016, Mr. Nusli Wadia has been acting in concert with Mr. Cyrus Mistry and been acting against the interest of the Tata Group. Further, Tata Sons believes that despite being purportedly an independent director of certain Tata companies including your company Mr. Wadia has been conducting himself as an interested party in a manner that is designed to cause harm to Tata Group and has not been conducting himself independently and instead has been inter alia galvanising independent directors," said Hussain.
Out of the 62 shareholder who requested the board to hear their views only five speakers asked the board to provide evidence to prove their accusation that Wadia was acting in concert with Mistry and therefore should be removed from the company.
“It is in your hands to vote with your conscience for what is right for your company and more important for the institution of independent directors”, Wadia said in his letter.
Wadia had mentioned his letter that he was in favour of shutting down the Nano production for it was a loss making project since the time it started sales in 2008. Nano has indeed been a drag on Tata Motors financials over the years.
“Due a combination of factors including the perception of it being a low-priced car the volumes initially anticipated did not materialise. It has been a loss-making scenario. Tata Motors has significantly written off investments in Nano over the last several years," Bhargava said.
Several shareholders spoke in favour of the Nano today hailing it as a saviour for the middle class buyer, even as sales of the mini car remains minuscule as of today despite several attempts made by the marketing team to spruce sales.
Interestingly, the same shareholders were complaining to the company at each of the Annual General Meetings about the car and its loss-making streak.