Industrialist Nusli Wadia, who is set to face a shareholders’ vote over his possible removal as director of Tata Motors, told investors that he had had differences with Ratan Tata over the continuation of the Nano.
“Over the years, I have as an independent director expressed my views and differed with several proposals during the time of Mr. Ratan Tata’s chairmanship,” Mr. Wadia wrote in a letter to shareholders. “The Nano, initially a car conceived to sell at Rs.1 lakh, was launched in 2008, (and) has proved to be a serious drain on the financial resources of Tata Motors,” he wrote.
Tata Sons, the group’s holding company, has sought shareholders’ backing to oust Mr. Wadia from the Tata Motors board.
Mr. Wadia said that the value of Tata Motors’ cross-holding in various Tata firms, amounting to about Rs.8,800 crore, was being maintained only to shore up the voting rights of the Tata Trusts and should be disinvested to pay off debt and save interest costs of about Rs.800 crore.
On the Nano, Mr. Wadia said, “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. The delay in the closure of Nano is a serious drain on the finances of the company,” said Mr. Wadia adding that several others had also raised questions regarding the continuing operation.
Flagging Mr. Tata’s meeting with union members in early November as inappropriate, Mr. Wadia said Mr. Tata had ‘galvanised’ the union and acted against the interests of the company. Mr. Wadia expressed concern that this meeting may impact ongoing discussions between the management and the Tata Motors Employees’ Union on the Productivity-Linked Wage Settlement.
Tata Motors Employees’ Union has extended its support to Tata Sons interim chairman Mr. Tata and issued a statement expressing loss of faith in Cyrus Mistry’s leadership. The Union said the meeting with Mr. Tata on November 10 was planned well in advance and was not meant ‘to negotiate a deal’.