Mumbai: India’s top bus and truck maker, Tata Motors, owes more than Rs12 billion ($245 million) in delayed dues to its vendors, the Economic Times reported on Thursday, sending the firm’s shares down 3%.
Without citing any named sources, the newspaper said the payment problem had been aggravated after Tata Motors shifted its plant to build the Nano — billed as the world’s cheapest car — to the western state of Gujarat from eastern West Bengal state last year.
“Vendors are as much a part of the industry as us. We are coping with the situation,” a Tata Motors spokesman said, but declined to comment on the report.
Shares in Tata Motors fell 2.7% to Rs131.60 by 0615 GMT, after losing as much as 5.3%, in Bombay Stock Exchange (BSE) down 1.1%.
“It’s a scary situation,” the Economic Times quoted an unnamed supplier in eastern India as saying. “If the company fails to pay us on time, many of the units will not be able to pay their loans and may have to shut down.”
Tata Motors, which last year bought the Jaguar and Land Rover brands, posted an unexpected loss in October-December but said the worst appeared to have passed.
Vishnu Mathur, executive director of Delhi-based Automotive Component Manufacturers’ Association, told the Economic Times he was not aware of any pending payments.
“This is an issue strictly between Tata Motors and vendors. It’s a specific customer-supplier relationship,” the paper quoted him as saying.