Chennai: Japanese company Nissan has sent out a termination notice to its joint venture partner Ashok Leyland Ltd, a week after the Hinduja Group’s flagship company moved a district court near Chennai over the legal dispute with Nissan.
While officials at Ashok Leyland declined to comment, saying the matter was “sub-judice”, a Nissan spokesperson said: “We are working with Ashok Leyland for a mutually agreeable solution. We have no further comments on the subject.”
Last week, a Nissan spokesperson said, “We have received the notice from Ashok Leyland and we are contesting it.”
Ashok Leyland’s partnership with Nissan for light commercial vehicles has been facing issues for more than a year. “The Stile and Evalia platforms were a mistake,” said Vinod Dasari, managing director, Ashok Leyland, to Mint earlier this month. Ashok Leyland Stile and Nissan Evalia were among the products that came out of the joint venture.
“Like any joint venture, we have issues with our joint venture partners. Sometimes good and sometimes bad,” said Dasari.
According to a document filed with the Board for Industrial and Financial Reconstruction (BIFR) in November last year, the joint venture’s net worth has been fully eroded due to accumulated losses, which stood at Rs.172.37 crore. The investment in the factory in Kanchipuram district, near Chennai, was Rs.9.29 crore, the BIFR document said.
In 2008, Nissan Motor and Ashok Leyland signed three joint ventures for light commercial vehicles business, power train manufacturing and technology development. While Ashok Leyland has 51% and Nissan has 49% in both vehicle manufacturing and power train companies, they are 50:50 partners in the technology development company.
Ashok Leyland had earlier said it wrote off Rs.214 crore from the joint venture which reported a loss of Rs.791 crore in the last fiscal.