Markets regulator Sebi has stepped up scrutiny on developments in the escalating Tata- Mistry feud, keeping a close vigil on all disclosures being made as also the finer details of the board meetings of listed firms of the Tata group.
The watchdog is seeking to prevent violation of corporate governance norms and protect investors' interest, for which it has also received communications from various stakeholders, including foreign institutional investors.
In the wake of boardroom battles at various Tata group companies, Sebi is keeping a close watch on the role of independent as well as non-executive directors, expecting them to work as guardians of minority shareholders.
Seeking ouster of Cyrus Mistry as director of these firms, Tata Sons has sought extraordinary general meetings (EGMs) of shareholders.
More than two dozen companies of the over USD 100 billion Tata group are listed and Sebi is focusing on protecting the interest of minority shareholders and ensuring that corporate governance norms are followed.
Since the ouster of Mistry as Chairman of Tata Sons -- the holding entity of most Tata group companies -- on October 24, there have been a lot allegations traded between the two sides even as Mistry continues to be chair the board of several firms.
Sources said Securities and Exchange Board of India (Sebi) has "stepped up scrutiny" of the developments related to the Tata-Mistry battle.
Apart from checking out the finer details of various board meetings of listed group firms, especially after Mistry's ouster, Sebi is also looking into representations and information provided by various stakeholders, sources added.
Among others, details of board meeting at Tata Motors -- where Mistry had alleged that it was following aggressive accounting practices -- are being looked into, they said.
According to sources, the watchdog is going through communications received from foreign institutional investors, retail investor associations and proxy advisory firms.
The role of independent directors at various group companies, who seem to be divided over the continuation of Mistry as their chairman and/or director, have made the situation complex.
Last week, Sebi chief U K Sinha said that a company's independent directors have the responsibility to protect shareholder interest, besides following the mandatory regulations laid out for them.
"I don't want to comment on any particular company or group. But the independent directors have the fiduciary duty to perform and that they have their loyalty and obligation to all their shareholders," Sinha had said.
"So, they must take care of interest of all shareholders, besides they have to follow Sebi guidelines (Sebi Act as well as Companies Act)," he had said.
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