Britannia Industries seeks legal advice on Ness Wadia's role

MUMBAI: Wadia group company Britannia Industries has sought external legal opinion over the continuation of Ness Wadia as director at the insistence of independent members of the board, following his conviction in Japan for possession of cannabis. The board has tapped retired Supreme Court chief justice TS Thakur for the opinion, said people with knowledge of the matter.

The move by the independent directors came despite chairman Nusli Wadia presenting the board with an opinion from top jurist Fali S Nariman that had endorsed his son staying on as director, they said. The elder Wadia, however, backed the move for another opinion, it is learnt.

The independent board members also spoke separately with Ness Wadia, said the people cited above. The younger Wadia wasn’t present when the board conferred on the issue but attended the rest of the meeting, which had been called to discuss earnings.


A Japanese court gave Wadia two years in jail last month for possessing 25 gm of cannabis resin but suspended the sentence for five years, allowing him to return to India.

Lawyers Differ on Impact of Ruling
A suspended sentence means he remains free for the period unless he breaks the law again in Japan.

There’s no consensus on the effect this will have on Ness Wadia’s role in the family-run Wadia Group. Stocks in the group’s companies, after plunging on April 30 when the news became public, have recovered. Wadia is managing director of Bombay Burmah and a director of Bombay Dyeing, Britannia Industries and National Peroxide.

Nusli Wadia didn’t respond to queries.

Ness Wadia’s future will hinge on whether his remaining a board member harms the spirit of corporate governance, said one of the persons cited above.

“We will take a call based on the view offered by Justice Thakur,” he said. “His offence in Japan does not fall under the serious category. So, a director on the board of a listed company will also not be disqualified for this offence.”

Lawyers differed on the impact of the court’s decision.

Ravi Singhania, managing partner of law firm Singhania & Partners, made the point that the conviction wasn’t by an Indian court. “Thus, under corporate governance provisions or other provisions of Companies Act, the Japanese court’s decision would not affect his position as a director,” he said.

He added that possession of a small quantity of cannabis for personal use may be considered in a different light by Indian courts, leading to a lighter punishment or fine. That the Japanese court suspended the sentence for five years implies that it’s not considered a serious offence in that country either, he said. “Thus, under corporate governance provisions or other provisions of the Companies Act, the Japanese court decision would not affect his position as a director,” Singhania said.

Other experts said that the jurisdiction where the offence occurred shouldn’t matter.

The Wadia Group had earlier said that the conviction would not prevent Ness Wadia from discharging his responsibilities, while some experts were of the view that he may have to fulfill the ‘fit and proper’ criteria as it applies to company directors.

“Ness Wadia is in India. The judgement is clear,” a Wadia Group spokesperson had said on April 30 after the news became public. “It is a suspended sentence. Hence it will not impact Ness Wadia in the discharge of any of his responsibilities and he will continue to play the role that he has done hitherto, both within the group and outside.”

Britannia Industries reported an 11.8% increase in consolidated net profit to Rs 294.27 crore for the March quarter from the year earlier.

Total income rose to Rs 2,860.75 crore from Rs 2,581.93 crore. For the fiscal year ended March, net profit rose 15% to Rs 1,155.46 crore.

Justice TS Thakur became an additional judge of the Jammu & Kashmir High Court in 1994 and chief justice of India in December 2015, retiring in January 2017. He had ordered the dismissal of the top management of the Board of Control for Cricket in India (BCCI) for failing to implement reforms recommended by the Justice Lodha committee in 2017.