Tata has vested interests in Nano venture: Mistry

In a direct attack on interim Tata Group Chairman Ratan Tata, ousted chairman Cyrus Mistry stated that the former has vested interests in the Nano venture due to which, the project continued despite making losses.

“As there is no line of sight to profitability for the Nano, any turnaround strategy for the company requires to shut it down. Emotional reasons alone have kept us away from this crucial decision. Another challenge in shutting down Nano is that it would stop the supply of the the car’s gliders to an entity that makes electric cars, and in which Mr Tata has a stake,” Mistry said in an email to directors of Tata Sons, which was marked to the trustees of Tata Trusts late on October 25.

According to Mistry, the Nano product development concept called for a car below Rs 1 lakh, but the costs were always above it and the product consistently lost money with losses peaking at Rs 1,000 crore. Mistry also stated in the mail that Tata Motors extended credit with lax risk assessment to Tata Motors in order to shore up sales and market share due to which non-performing assets mounted to being in excess of Rs 4,000 crore.

Tata Nano was the pet project of the then Tata Group Chairman Ratan Tata, under which, he was looking to provide the cheapest car in the world with a price tag of around Rs 1 lakh. The project has been constantly riddled with controversies.

Tata Motors was planning to manufacture the Nano at Singur in West Bengal. But the company had to shift its production to Sanand in Gujarat, following protests by local farmers.