Wadia likely to make 3 Tata EGMs tougher

Director will address meets at Tata Steel, Tata Motors and Tata Chemicals where resolutions to remove him will be put to vote

Even as number crunching and investor road shows to ensure sufficient backing from shareholders have kept the Tata group executives busy for the past few weeks, the top team is now learnt to be focused on how to deal with some of the oral representations and speeches that could turn contentious and acrimonious at the extraordinary general meetings (EGMs) of the group companies.

While six EGMs have been lined up, starting December 13, the real test for the group could come a week later, on December 21, when Tata Steel holds its EGM, seeking to remove Cyrus Mistry and Nusli Wadia as directors. Wadia is a director in three Tata firms — Tata Steel, Tata Motors and Tata Chemicals — and he is expected to address shareholders at all three EGMs, where resolutions to remove him as director will be put to vote.

Those three EGMs are being seen as the most challenging for the group as the backroom war, charges and counter-charges between Wadia and the Tatas would play out in the open before shareholders, a source said. He, however, pointed out that voting by shareholders, a lot of which will be done electronically ahead of the EGMs, would be distinct from the speeches that are likely to follow. Wadia has threatened legal action against the Tatas after it sought his removal from the three group companies where he’s a director. Apart from TCS, Tata Steel, Tata Motors and Tata Chemicals, two more EGMs have been called by Tata Power and Indian Hotels Company, which runs the Taj chain. All these group companies are seeking to remove Mistry as director. On October 24, Mistry was ousted as Tata Sons chairman. Sources in the Mistry camp said the “costly decisions’’ taken by the Tatas in relation to every company would come up at the EGMs, to drive home the point that those steps resulted in huge losses. In case of Tata Chemicals, for instance, Mistry and Wadia may explain to shareholders why acquisition of Tata Chemicals Europe did not do well. “It was one of those overseas acquisition plans of Tatas that pulled the company down,” said a source. At Tata Steel EGM, the measures taken by Mistry to reduce losses in Europe after the board asked him to do so are likely to come up. Also expected to be raised by the Cyrus camp is the ~70,000-crore loss to Tata Steel due to Corus misadventure. Mistry camp may also talk about how sale of European assets was necessary in the backdrop of Chinese industry crisis. In the Tata Motors EGM, the Mistry-Wadia camp may emphasise on the ~25,000crore losses in the Nano project and the action taken by Mistry to develop new products which have been accepted by consumers. While Tata Sons holding in every group company will be an indicator of its strength at the EGMs, the group is believed to be confident of getting the required votes from shareholders at all the meetings. Going by numbers, getting a simple majority at the TCS EGM will be easy as promoters held 73.3 per cent in the company as of September.