Speaking about the Tata Nano, Cyrus Mistry also accused Ratan Tata (in pic) for conflict of interest
Mumbai:
Cyrus Mistry, sacked as Tata Chairman this week, has said in his explosive email to board members that the group's auto maker Tata Motors has been unable to shut down the loss-making small car Nano due to "emotional reasons."
"Another challenge in shutting down Nano is that it would top the supply of Nano gliders to an entity that makes electric cars and in which Mr Tata has a stake," Mr Mistry has alleged, referring to Ratan Tata, who has taken over as interim Chairman till a replacement is found for Mr Mistry.
Cyrus Mistry, who was chairman for almost four years, has prescribed shutting down Nano - a pet project of Ratan Tata - to effect a turnaround in Tata Motors.
"The Nano product development required concept called for a car below Rs 1 lakh but the cost were always above this. This product has consistently lost money, peaking at Rs 1,000 crore," Mr Mistry said in his five-page email written a day after he was ousted as the Chairman of India's largest conglomerate.
He has called his removal illegal and has alleged interference by Mr Tata during his tenure, highlighting what he said were poor decisions.
Tata's dream project Nano came alive in January 2008 when it was launched at the promised price tag of Rs 1 lakh, making it the cheapest car in the world.
However, the Nano faced one setback after another, beginning with Tata Motors having to shift the manufacturing plant of the car from its original site at Singur in West Bengal due to a farmers' agitation led by Mamata Banerjee, now chief minister.
The Nano plant was shifted to Sanand in Gujarat.
Although the company managed to roll out the car from its new location, initial instances of the car catching fire raised many safety issues. The Nano could never live up to its potential, with Ratan Tata even admitting that Tata Motors had made a mistake by marketing it as the cheapest car.
Mr Mistry has highlighted more problems faced by Tata Motors, which he has tagged among five companies he has called "legacy hotspots."
"Before 2013, in order to shore up sales and market share, Tata Motors Finance extended credit with lax risk assessment. As a result the NPAs mounted to being in excess of Rs 4,000 crore," Mr Mistry wrote.
Besides, he said, historically, the company had employed aggressive accounting to capitalise a substantial proportion of the product development expenses creating a future liability.
"Another challenge in shutting down Nano is that it would top the supply of Nano gliders to an entity that makes electric cars and in which Mr Tata has a stake," Mr Mistry has alleged, referring to Ratan Tata, who has taken over as interim Chairman till a replacement is found for Mr Mistry.
Cyrus Mistry, who was chairman for almost four years, has prescribed shutting down Nano - a pet project of Ratan Tata - to effect a turnaround in Tata Motors.
"The Nano product development required concept called for a car below Rs 1 lakh but the cost were always above this. This product has consistently lost money, peaking at Rs 1,000 crore," Mr Mistry said in his five-page email written a day after he was ousted as the Chairman of India's largest conglomerate.
He has called his removal illegal and has alleged interference by Mr Tata during his tenure, highlighting what he said were poor decisions.
Tata's dream project Nano came alive in January 2008 when it was launched at the promised price tag of Rs 1 lakh, making it the cheapest car in the world.
However, the Nano faced one setback after another, beginning with Tata Motors having to shift the manufacturing plant of the car from its original site at Singur in West Bengal due to a farmers' agitation led by Mamata Banerjee, now chief minister.
The Nano plant was shifted to Sanand in Gujarat.
Although the company managed to roll out the car from its new location, initial instances of the car catching fire raised many safety issues. The Nano could never live up to its potential, with Ratan Tata even admitting that Tata Motors had made a mistake by marketing it as the cheapest car.
Mr Mistry has highlighted more problems faced by Tata Motors, which he has tagged among five companies he has called "legacy hotspots."
"Before 2013, in order to shore up sales and market share, Tata Motors Finance extended credit with lax risk assessment. As a result the NPAs mounted to being in excess of Rs 4,000 crore," Mr Mistry wrote.
Besides, he said, historically, the company had employed aggressive accounting to capitalise a substantial proportion of the product development expenses creating a future liability.
Track Latest News Live on NDTV.com and get news updates from India and around the world
