Tata Motors alleges governance lapse
An independent director of Tata Motors has alleged governance lapses by the automaker's parent, Tata Sons, and said it wrongly influenced directors, stirring up a public power struggle at India's biggest conglomerate. In a boardroom coup in October, Cyrus Mistry was removed as chairman of Tata Sons, holding company of the $100 billion steel-to-autos Tata empire, with family patriach Ratan Tata temporarily returning to the helm. Mistry, who had sought to strengthen the firm's governance, remains a director of several group companies such as Tata Motors, Tata Steel and Indian Hotels Co Ltd. Special shareholder meetings have been called by these companies next week to remove him. In a scathing 13-page letter to shareholders, Wadia, who has been with Tata for about four decades, said Tata Sons "sought to illegally and inappropriately influence events and coerce the directors." Wadia, head of the Wadia group that has business interests ranging from textiles to aviation, alleged that Tata Sons hurriedly sought legal advice to influence Nov. 14 meetings of Tata Motors' independent directors and its board of directors. Wadia said that, according to the legal opinion obtained by Tata Sons, if the independent directors were to express their support for Mistry, it could not be considered "material" and should not be disclosed to the stock exchanges, thus preventing Mistry's supporters from issuing any public statement. Wadia sought legal advice on the company's effective silencing of the independent directors and was told that it was not only inappropriate, but also illegal, he said. In a statement, Tata Sons rejected Wadia's allegations and said that it had obtained a legal opinion on whether independent directors could evaluate the chairman's performance without taking account of the views of the executive and non-executive directors. It had also sought advice on whether the independent directors could make public their views on the chairman without the board of directors approving it.
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