Tata Motors shareholders lashed out at the company at its Annual General Meeting over lack of dividend payments to them and questioned the impact of JLR growth on Tata Motors.

At least three shareholders questioned Chairman N Chandrasekaran at the AGM on Tuesday asking why the benefits of JLR profits are not shared with the parent company.

“Tata Motors is facing an issue where a subsidiary is three times larger than the parent yet it is giving out only £150 million in dividends, which is not helping the shareholders,” said Gonsalves, one of the shareholders at the AGM.

Another shareholder Tamal Majoomdar pointed out that while JLR CEO Ralph Speth says that the company is not ordinary, they are paying an ordinary dividend of £150 million to ordinary shareholders.

He also questioned the high salary paid to JLR CEO at the time when the overall company is making losses.

However, Chandrasekaran dismissed the possibilities of JLR paying higher dividends to Tata Motors saying the luxury brand is chasing marketshare against competitors like Mercedes and BMW who have much higher volumes, and thus, JLR needs to invest in new products and increase its marketshare.

“JLR is doing exceptional performance,” Chandrasekaran said. “It doesn’t happen without hard work. JLR needs to deliver double digit growth to compete with Mercedes and BMW. This is a journey and we need to continue to achieve growth. That’s why the dividend is fixed at £150 million.”

Chandrasekaran added that JLR spends $4.2-4.5 billion per year on R&D, which is required to remain competitive in the market.

He said JLR CEO is paid a salary of about £7 million, which is comparable to other CEO salaries in the luxury car segment.

“I know that from a shareholder perspective it is disappointing that the company has been unable to pay a dividend in the light of its significant losses in the standalone business. I assure you that we are working with urgency in this matter and making an earnest effort to turn profitable,” Chandrasekaran said.

E-vehicle space

Investors also showed concerns over Tata Motors’ lack of presence in the electric vehicle space, where the government is focussing and the market is largely dominated by jone player Mahindra & Mahindra.

Chandrasekaran acknowledged that EV is a space that the company needs to address and said plans are in place to look for the right platforms and device a strategy in that regard, without giving specifics on how the company plans to exploit the newly emerging market place.

However, he pointed that the bigger concern for the company is the commercial vehicle marketshare, which it has been losing to competition, given the high costs and delays in launching new products.

“In commercial vehicles, we are focussed on ensuring that all product launches happen within our laid down timelines without any delay, changing our trajectory of our marketshare curve and start gaining marketshare, and serious cost improvement plan,” Chandrasekaran said.

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