Wadia Group chairman Nusli Wadia has distanced himself from the dispute between Ratan Tata and Cyrus Mistry. He has withdrawn all defamation cases against Tata Group's chairman emeritus. Tata had alleged Wadia "galvanised" other independent directors, in favour of Mistry, to act against the interests of the group.
"Since the whole dimension of Tata-Mistry dispute has changed over the last three years and the Supreme Court has asked industrialists to settle the matter through dialogues, Wadia has taken the first step to disassociate himself from the corporate battle. It doesn't mean that the veterans will mend their broken relations. There is a lot to happen," said a Mumbai-based senior corporate lawyer.
The dispute triggered between Tata and Wadia with the unceremonious removal of Mistry from the chairmanship. Wadia, who was on the boards of major Tata group companies, claimed it was shocking and violated corporate governance standards. Tata Sons, in a special shareholder meetings of group companies in December 2016, removed Wadia from the boards of Tata Motors, Tata Steel and Tata Chemicals, along with Mistry.
In retaliation, Wadia filed civil and criminal defamation lawsuits against Ratan Tata personally, Tata Sons and its other directors. He claimed Rs 3,000 crore in damages on the grounds that the notices seeking his removal had hurt his reputation and goodwill.
After Cyrus Mistry won the legal battle in the National Company Law Appellate Tribunal (NCLAT), the dimension of the case has completely changed.
According to a corporate executive, the 75-year-old Nusli Wadia, who is often referred to as the corporate samurai for his famous legal battles, now has no reason to continue the lawsuits since NCLAT has reprimanded Ratan Tata and his close aides in its order.
"The Supreme Court's direction to settle the matter came in at the right time and Wadia took the opportunity to become the first mover in reducing the bitterness between the two corporate czars," he added.
The legal battle is now between Ratan Tata and the Mistry family, which holds 18.4 per cent stake in Tata Sons. Mistry wants to regain the director position in the holding company of Tata Group and turn Tata Sons back into a public company from a private company.
The Wadia and Tata families had long-standing ties during the time of JRD Tata, who was Tata group chairman for over five decades and died in 1993. It was JRD Tata who had stopped Neville Wadia, father of Nusli Wadia, from selling the family's textile business Bombay Dyeing in 1971. Nusli Wadia had named his younger son Jeh after the first name of JRD, which is Jehangir.
Wadia said years ago that JRD had considered him for the chairmanship of Tata Sons. But he felt it was Ratan Tata's rightful post. For decades, Wadia was a close friend of Ratan Tata and helped him fight the battle against the stalwarts at the helm of Tata group's major companies post-1991, when Tata became the chairman.