 "Nusli Wadia")
Well-known industrialist Nusli Wadia shot off a 13-page letter to the shareholders of Tata Motors rubbishing allegations against him while highlighting his disapproval on loss-making projects such as the Nano.
This is the second such letter sent by Wadia to shareholders of a Tata Group company where we is an independent director. He voiced his concern in an earlier letter sent to the shareholders of Tata Steel.
Extraordinary general meetings (EGMs) have been called by the boards of Tata Motors and Tata Steel for removing Wadia as the director. Tata Sons has alleged that Wadia who has been with the two boards for decades has been acting in concert with Cyrus Mistry.
"The Nano, initially a car conceived to sell at Rs 1 lakh, has proved to be a serious drain on the financial resources of Tata Motors. Even at a price of Rs 2.25 lakhs, 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", Wadia said in the letter.
The Nano was a project spearheaded by Ratan Tata aimed at providing economical personal transport option to millions of families who use two-wheelers or have to depend on public mode of transport. Despite years of effort to revive the Nano it remains a grossly underperforming product and a drain on Tata Motors finances.
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"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 (PV). The investment and losses on Nano have been in thousands of crores rupees. Concerns have been raised not only by me but by several others regarding the continuing operation", Wadia added.
Wadia even raised concerns over corporate governance terming the behaviour of Ratan Tata as 'inappropriate'.
"An agreement that was initialled with the union after 14 months of discussion and negotiation where for the first time in the history of Tata Motors Pune a Productivity Linked settlement was initialled and to be signed. It now a matter of conjecture as to whether this agreement will be signed or not. These actions on the part of Mr. Tata "by galvanizing" the union and "acting prejudicially against the interest of your company may put the company and its future in great jeopardy and impact the overall moral of the workers, employees and management of Tata Motors", Wadia said.
