Mumbai: Industrialist Nusli Wadia has written to shareholders of Tata Chemicals Ltd ahead of an extraordinary general meeting (EGM) on Friday that seeks to remove him from the company’s board, reiterating issues surrounding lack of corporate governance and poor business decisions.
Friday’s EGM will be the third and last called for removal of Wadia as independent director from group companies.
Wadia wrote that various acquisitions—some of which he did not approve of—have led to Tata Chemicals’ consolidated debt rising to Rs8,695 crore from Rs1,827 crore over the past 10 years. Total impairments of various investments made is about Rs2,000 crore, he said.
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Wadia, who has been an independent director on the board of Tata Chemicals for 35 years, said he disagreed with several proposals during the time of Ratan Tata’s chairmanship up to 2012, including the proposal in 2003 for merger of the Haldia plant with the company, involving an investment of Rs347 crore. Wadia said he had warned of possible future losses from the merged entity. He and other board members had also expressed “serious apprehensions" on the proposal for the Rs800 crore acquisition of the Brunner Mond Group in the UK, Kenya and Netherlands, he wrote.
Wadia, who is chairman of Bombay Dyeing and Manufacturing Co. Ltd, alleged in his earlier representation to shareholders that ahead of Tata Chemicals’s 10 November board meeting, its managing director R. Mukundan held a meeting of senior management and asked them to sign a pre-drafted letter seeking to endorse the stand of Tata Sons Ltd.
In this representation, Wadia had said that at the board meeting, which followed the meeting of independent directors on 10 November, Mukundan conveyed that in the event the independent directors chose to issue any statement which made a reference to Tata Sons’s ousted chairman Cyrus Mistry, he would not permit the company secretary to issue the proposed communication. This, he had said, was a serious cause for concern on the lack of corporate governance in the conduct of the affairs of the company resulting from the undue interference by the dominant promoter.
Wadia claimed that the cross-holdings of Tata Chemicals in other Tata companies are being maintained to indirectly keep the voting rights and control in Tata Sons. These large cross-holdings are in various Tata companies, including unlisted ones. “If these holdings were to be disposed of, your company would be debt-free," Wadia wrote.
Wadia has also served as an independent director on boards of Tata Steel and Tata Motors for 37 and 18 years, respectively. Following EGMs held by these two companies this week, Wadia has been removed as a director from their boards.
Last week, he filed a Rs3,000 crore defamation suit against Ratan Tata and the board of directors of Tata Sons, calling upon the company to prove and substantiate the charges levelled against him with documentary evidence.