Mumbai: With Tata Motors skipping a dividend payout for the first time in 15 years, chairman Cyrus Mistry on Thursday said he is pained for not being able to give the "rightful dividend" to the investors, who questioned the reasons given by the company at its AGM here on Thursday.
Answering shareholders' queries and demands in this regard, Mistry said, "My personal belief is that it's a bad day for the company. I feel extremely unfortunate this day.
"Let me tell you it does not give me any pleasure to deny your rightful dividend. I know that many of you depend a lot on the dividend."
"But I request you to look the finances of the company and also look for the long term. We have to make some sacrifices for the long-term good of our company. I am deeply pained by our decision to not pay the dividend for FY15," an emotional Mistry said.
He asserted that "Tata Motors remains committed to achieving better profitability through prudent cost management, world class quality, and introducing innovative and exciting products and services."
Tata Motors had last skipped a dividend payout in fiscal year 2000-01, when Ratan Tata was the chairman. This is also only the second instance in the company's history when it has not paid a dividend.
Angry at the decision, many shareholders today questioned the rationale given by the company, including poor finances as also new laws and accounting rules.
"I've all the right to get dividend from this company. I am a senior citizen and I depend on the dividend income for my expenses. Mr chairman, you have to remember that I was an investor in the company even before you were born," an agitated shareholder told Mistry at the 70th AGM of the company here this evening.
Another investor said, "in your first year you paid us Rs 4 a share as dividend, in the second year it was halved to Rs 2 and in the third year you are saying zero dividend even as you came to us many times to get our permission to hike executive pay".
A third investor ripped apart Mistry's argument for not giving the payout, and demanded a logical explanation for the same, saying "your speech does not convince us as it is only a general statement".
For the first time in its history in FY 2001, Tata Motors did not pay annual dividend when Ratan Tata was the chairman.
"The argument that you have given in shallow and general. Please explain the actual reasons for denying the dividend. We need some cogent answers. I don't know which accounting rules you are citing," said an irate shareholder.