Cyrus Mistry fires salvo on Tata Motors

The tussle between Tata Group and Cyrus Mistry keeps on erupting.

Hours after Tata Motors annual general meeting (AGM) ended, Cyrus Mistry's office issued a statement saying its practice of lending without adequate risk assessment, particularly in the Nano and small commercial vehicle (SCV) segment, led to a huge NPA loss of Rs 4,000 crore for both Tata Motors and Tata Motor Finance.

This easy finance artificially bolstered the market share figures and as soon as this was reined in, we saw a steep drop in the volumes of Small Commercial Vehicles (SCV) and the Nano. This led to the loss in market share for the company which subsequently led to retrenching and other issues, the statement said. Mistry's office also accused potential areas of conflict of interest in the supply of Nano body shells to Jayem Motors where Ratan Tata has made investments in his personal capacity, thus forcing the Nano production to continue on a subscale basis for almost one year after the original decision had been taken to discontinue the Nano production.

However, sources in Tata Motors denied the allegations saying all drop in CV & PV market shares happened in five years when Mistry was at the helm. Further, Nano constitutes a very small part of Tata Motors. Out of Rs 280,000 cr revenue, only about Rs 9000 crore is from PV, and of that nano is a very small amount, the sources said. Talking about the personal allegation against Ratan Tata, the source said it was Tata himself who had brought it to the attention of the Tata Sons board on his personal investment with Jayem, and that there has been no commercial arrangement whatsoever between Tata Motors and Jayem in this regard.