Maruti Suzuki India: Maruti-Suzuki's plan to set up a car plant in Gujarat

Maruti-Suzuki's plan to set up a car plant in Gujarat as a fully-owned subsidiary of its Japanese parent has already been objected to by seven mutual fund houses holding stakes in the car company. A decision on the proposed plant is likely to be taken by Maruti after its forthcoming extraordinary general meeting which is likely to be held later this month. It needs to get the permission of at least 75 per cent of shareholders for investment in the plant.

Written by: Oncars India

Published: November 10, 2014, 5:43 PM IST

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https://www.india.com/car-and-bike/latest-news/news-cars/maruti-suzuki-india-maruti-suzukis-plan-to-set-up-a-car-plant-in-gujarat-3301513/ Copy

LIC Nomura MF, which holds 0.04 per cent stake in Maruti, has also been kept in the dark about the decision. However, it felt that it will raise objections in case any decision is taken by the committee and which was not informed to the MF house in advance.

“Formation of a committee was within the purview of the AFMI. However, we will raise a question before the association in case any decision is taken by the committee without keeping us informed,” LIC Nomura MF Chief Executive Nilesh Sathe said.

While LIC is the single largest minority investor in the country's largest car maker with 6.8 per cent holding, seven mutual funds hold around 6.53 per cent and domestic financial institutions hold 7.95 per cent in the country's largest carmaker.

An official of LIC said the financial giant is yet to take a view on the Maruti-Suzuki's plan. “A committee is a good forum to have consultation within the industry on issues related to corporate governance. However, any decision to be taken by the committee will not be binding on us when we exercise our voting rights,” Union KBC Mutual Fund Chief Executive G Pradeepkumar said.

However, the Institutional Investor Advisory Services (IIAS) has welcomed the AMFI move.”It's good to know that mutual funds and institutional investors are thinking about some critical transactions and getting more active, because every single vote of mutual fund houses, big or small, will count during the EGM of the company,” IIAS Chief Operating Officer Hetal Dalal said. 

(PTI)