Nusli Wadia, an independent director of Tata Steel facing removal from the board at an upcoming EGM, has warned that more financial support to Tata Steel Europe will lead to further asset impairment.

In a letter to shareholders, he said Tata Steel has already suffered an impairment of ₹35,000 crore and is likely to face substantial impairment in the future. The capital employed in Tata Steel Europe is about ₹75,000 crore, with absolutely no returns. Any returns looks near impossible, he added.

“I had differed strongly on providing continuous financial resources towards Tata Steel Europe from 2012, even before Ratan Tata stepped down,” he said. Since then, he said, the investment has increased by ₹25,000 crore, with no returns.

These funds could have been used to complete the six-million-tonne plant in Kalinganagar as also acquiring a third steel plant. With further investments in the UK, the situation will deteriorate further and impair Tata Steel’s India operations, he said.

Wadia pointed out that Tata Steel was founded by Jamsetji Tata in 1907 when all the steel used in India was imported from Britain. It is ironic that Ratan Tata is deploying more funds to save jobs in Europe at the cost of Tata Steel India, he said.

“I was invited to join the Tata Steel board by JRD Tata about four decades ago and served the company as an independent director for 37 years, longer than Ratan Tata. I now stand accused of having lost my independence over events that transpired in less than 17 days,” he said.

Wadia also expressed concerns about statements made by Lord Kumar Bhattacharya, part of the new Tata Sons Chairman search panel, in an interview with British newspaper The Guardian. Bhattacharya said Tata Steel plans to save 11,000 jobs in the UK with more investments. This was even before the proposal had been considered by the board, said Wadia, and amounts to insider trading.

Tata Sons and trustees of Tata Trusts often sought sensitive information on the company’s affairs. This, too, was tantamount to insider trading, he said.

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