Companies

Delay in closure of Nano is a drain on Tata Motors’ resources: Nusli Wadia

Our Bureau Mumbai | Updated on January 27, 2018 Published on December 14, 2016

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Nusli Wadia, an independent director on the board of Tata Motors, has told the company shareholders that Nano was a drain on the automaker’s resources.

In a letter to the shareholders of Tata Motors, Wadia said that the Nano, initially a car conceived to sell at ₹1 lakh and launched in 2008, has proved to be a serious drain on the financial resources of Tata Motors. “Even at a price of ₹2.25 lakh, the car neither sells nor is viable as every sale of the vehicle is at a substantial loss to the company. After its commercial failure which became evident not too long after its launch, I differed strongly in its continued operations and funding. Huge losses have been incurred over the years,” he said.

“The plan on which the investment was made was for 250,000 cars while the production in the year 2015-16 was in the region of 20,000 cars and presently far less. The delay in the closure of Nano is a serious drain on the finances of the company, in addition it has created very negative image of the Passenger Vehicle Business (PVB) of the company,” Wadia said.

This comes even as a notice has been sent by Tata Sons for Wadia’s removal as Independent Director on the board of Tata Motors for allegedly acting in concert with Cyrus Mitry. Terming the allegations as unsubstantiated, baseless, false, motivated, defamatory and libellous, Wadia said: “My actions as an Independent Director are totally independent and not linked to any individual. The very reason for which I am being sought to be removed by Tata Sons is my independence of mind and action, in the discharge of my fiduciary duties as an independent director of your company.”

Wadia also alleged that the Interim Chairman of Tata Sons, Ratan Tata, had acted inappropriately “by galvanising” the employees union and “acting prejudicially” against the interest of the company. Tata Motors will hold its EGM on December 22.

Published on December 14, 2016

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