Tata Motors is right there among the top five losers of the day; the stock opened over 4% lower at Rs.139 and even went down to an intraday low at Rs.130.50, fall of 10%. Its LC of 15% is at Rs.123.25.
Like what had happened las year, when Tata Steel was accused of colluding with other firms on prices of bearings, this year, the Competition Commission of India (CCI) is reviewing a complaint on Tata Motors that it is abusing its power and dictated terms around the quantity and type of vehicles its former dealer in northern India, Varanasi Auto Sales, should stock.
The complaint alleged that Tata Motors would stop supplying vehicles to the dealer if repayment of loans advanced by Tata Motors Finance and Tata Capital Financial Services got delayed. It is by colluding with its own finance arms that, the complainant alleged, Tata Motors retained its market share.
The company has obviously denied these allegations and will support CCI’s investigation and is also taking legal action against Varanasi Auto Sales, the dealer who filed the complaint.