Four minority shareholders of Tata Group firms today moved the Bombay High Court challenging the proposed removal of industrialist Nusli Wadia as an independent director, while Tata Sons, the Group’s holding company, requested the court to make it a party.
With this suit, for the first time the government has been dragged into the legal wrangling set off by the sacking of Cyrus Mistry as Tata Group chairman, as the Ministry of Corporate Affairs and Law Ministry have been made defendants.
The suit came up before Justice S J Kathawala, who asked the plaintiffs to give a copy of the plaint to the Union government and adjourned the matter to December 16 when the court would also hear Tata Sons’ plea to let it become a party.
Janak Mathuradas, Yogesh Mathuradas, Chanda Mathuradas and Pramila Mathuradas, minority shareholders of Tata Chemicals, Tata Motors and Tata Steel, wanted the HC to restrain promoters of these firms from voting at Extraordinary General Meetings (EGMs), scheduled for December 21 to 23, on a resolution to remove Wadia.
They also challenged a rule in the Companies Act which allows promoters to vote on a resolution seeking removal of independent directors.
Only public shareholder should be allowed to vote on a resolution on removal of independent directors as these directors discharge a fiduciary duty towards minority shareholders and protect their interests, they said.
Independent directors cannot be equated with non-independent directors and cannot be removed under section 169 of the Companies Act, 2013, the suit said.
The three Tata companies, on a direction of Tata Sons, have called EGMs to remove Wadia from their boards under section 169 of the Act.
Last week, another group of minority shareholders of Tata companies had moved the High Court claiming damages from Tata Sons’ interim chairman Ratan Tata and others for losses suffered by investors after shares of group companies fell following Mistry’s sacking.