Published: Sun, December 18, 2016
Research | By Jennifer Evans

Tata Trusts say Ratan not to step down from chairmanship

Tata Sons was not immediately reachable for comment. Next hearing would be on February 6. After Tata Trusts, Mistry's Shapoorji Pallonji is the second largest shareholder in Tata Sons with around 18 per cent stake.

The petitioners had sought to restrain promoters from voting at the Extraordinary General Body Meetings (EGMs) on a resolution seeking to remove industrialist Nusli Wadia as an Independent Director. Their lawyer Navroze Seervai argued that only public shareholders should be allowed to vote on the resolution on removal of independent directors as these directors protect the interests of minority shareholders.

Accordingly, Independent Directors could not be equated with non-independent directors and could not be removed under the Companies Act' Section 169, they said.

However, the single bench of Justice Kathawalla ordered that one position on the board of each of the three Tata companies be kept vacant till the court rules on the maintainability of the suit.

Contrary to reports that said Ratan Tata will be stepping down as the chairman of Tata Trusts, Tata Groups has now released a statement refuting the claims, reported The Indian Express.

"Tata Sons appears anxious about the Tata Motors EGM vote outcome", Ramesh Vaidyanathan, managing partner of law firm Advaya Legal in Mumbai, said by phone Wednesday.

In 2015, Ratan Tata and Soonawala had insisted that the board of directors of these companies pass resolutions to permit the management to legally pass information to the board of directors of Tata Sons.

The four minority shareholders of these three companies moved the Bombay high court against the special notice on Wadia's removal earlier this month. Neither the Securities and Exchange Board of India nor the HC has the power to stop the removal of a director, he said. The carmaker's independent directors, which include outspoken Mistry ally Nusli Wadia, expressed support on November 14 for the decisions taken during Mistry's tenure as chairman.

A Sebi official said the regulator had received a letter from Wadia and it would be looking into the issues raised in it.

Appearing for Wadia, Janak Dwarkadas said independent directors are the watchdog of investors and can not be removed abruptly without any specific reasons. The statement follows media reports suggesting that Ratan Tata is likely to step down as chairman of Tata Trusts.

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