Tata Finance Hands Out Pink Slips To 40 Staff

Tata Finance Ltd (TFL) has decided to retrench 40 employees in its corporate lending and merchant banking division which will be closed down in due course. Francis J da Cunha, executive director of the company, who confirmed the development, said, "All the employees of the division have been asked to go as the division is proposed to be shut down. Some employees, however, will be redeployed in other divisions of the company."

According to a Tata Finance spokesperson, the company has given notice to the employees till February 24 to look out for greener pastures.

The company in its annual report had said that it is planning to sell its windmill division and credit card division subject to shareholders' approval as both the business were considered as non-core. The company was also planning to curtail and eventually exit from the corporate finance.

 

Tata Finance has proposed to sell assets of Rs 650 crore in its non-core businesses by December to prop up its capital adequacy ratio. Of this, Rs 350 crore of assets will be sold by June and rest by the end of the current calendar year. The company will seek shareholders' nod for this at its annual general meeting to be held on January 23.

TFL's credit card business which is through a joint venture with American Express -- Tata Finance Amex Ltd -- has 62,839 members as on November 30, 2001. The JV had made a loss of Rs 4.94 crore in 2000-01. The company had a paid up share capital of Rs 23 crore as on March 31, 2001 and an authorised share capital of Rs 30 crore. TFL and Indian Hotels Company Ltd jointly hold 65 per cent in the company, while the rest 35 per cent is held by the American Express group. The windmill division of the company has a total asset of Rs 199.17 crore.

TFL has incurred a loss of Rs 395.56 crore in 2000-01 compared to a profit of Rs 56.78 crore in 1999-2000. The huge loss was mainly on account of provisions of Rs 315 crore made by the company towards loans and investments made by the affiliate companies. Niskalp Investment and Trading itself made a loss of Rs 110 crore and suffered Rs 196.48 crore of erosion in its value of investments.