Tata Steel independent director Nusli Wadia has been removed from the company’s board with 90.8 per cent of shareholders present at Wednesday’s extraordinary general meeting voting in favour of his removal. Wadia has been on the board of Tata Steel for 37 years, one of the longest serving directors on the board of a Tata company.
Out of its total shares of 97.12 crore, 62.54 crore votes were polled, which translate into 64.4 per cent. “Total vote in favour of the resolution was 56.79 crore, i.e. 90.80 per cent, and total vote against the motion was 5.75 crore, i.e. 9.20 per cent,” the company said in a regulatory filing. The resolution for the removal of Cyrus Mistry was not taken up as he had resigned from the board on Monday. “The motion carried in favour of the resolution with overwhelming majority way beyond a special resolution hurdle of 75 per cent, even though this motion was an ordinary resolution requiring simple majority,” the company said. Tata Sons and promoter firms held 30.45 crore shares in the company, of which 29.59 crore voted.
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It further said the total number of votes polled by non-promoter shareholders was 32.95 crore, of which 27.20 crore, that is 82.5 per cent, was in favour of the resolution. The total number of votes polled against the proposal was 5.75 crore, accounting for 17.5 per cent of non-promoters. The company claimed that even if the promoter votes were excluded, the voting result showed an overwhelming majority — three-fourth of shareholders — was in favour of the resolution. Institutional investors held a total of 42.64 crore shares out of which 31.99 crore, which is 75 per cent, were polled.
As much as 26.39 crore of institutional shares, which is 82.5 per cent, voted in favour of Wadia’s removal, Tata Steel said. The share of institutional shares which polled against the resolution was 5.60 crore, that is 17.5 per cent. As for retail shareholders, the company said that out of a total of 24.02 crore shares, 96.14 lakh voted, with 81.21 lakh (84.4 per cent) in favour and 15 lakh (15.6 per cent) against. Both institutional and retail voted on a similar pattern with significant majority well beyond the 3/4th majority mark in all categories, it said.
Wadia had stayed away from the EGM, saying it was stage-managed. Last week, he filed a Rs 3,000-crore defamation suit against Ratan Tata, Tata Sons and some of its directors. He flied the case in the Bombay High Court following the move by Tata Sons to remove him from the board of the three companies. “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 in the selection and choice of speakers as never before seen in Indian corporate history,” he wrote to the Tata Steel shareholders.
“What is at stake is not whether I am removed or not, but the fate of the very institution of independent director that has been created in law and by Sebi to safeguard the interests of all stakeholders. If independent directors can be removed at the whim and fancy of a promoter, then their role will be reduced to that of ‘yes men’,” Wadia said in the letter. “I have outlined events relating to various decisions of the board. Most important of all to Tata Steel investment in Corus and events that have led to the impairment of approximately Rs 35,000 crore and a capital employed in the region of Rs 75,000 crore in which it is highly unlikely that shareholders will ever see any return,” he said.