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Maruti Board May Fix Dates for Voting on Gujarat Plant Next Week: Report

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New Delhi: Maruti Suzuki India’s board is likely to take up next week finalisation of dates for voting by minority shareholders to allow parent Suzuki to own and invest in the upcoming Gujarat plant.

The board of country’s largest carmaker is also scheduled to meet on October 27 for consideration of its second quarter financial results, among others.

According to sources, with most of the necessary steps for letting Suzuki own the upcoming Gujarat plant in place, finalisation of dates for the voting is imminent.

“The next thing on the line is to finalise timing for the minority shareholders’ voting. The matter is likely to be part of the agenda in the upcoming board meeting,” a source said.

The minority shareholders’ voting could be done through either a postal ballot or via online, the source added.

Maruti is undertaking roadshows, to convince both global and domestic investors on its decision to let its parent own the plant at Gujarat, which was initially proposed to be set up by the company.

This is for the second time that the company is conducting such campaigns.

Last year, the company’s management led by its chairman R C Bhargava, along with senior officials, had met institutional investors in the US, the UK, Asia and India.

Last month, Mr Bhargava had stated that he expected to get a crucial clearance from the Gujarat government on the matter. Initially, the facility was proposed to be owned by Maruti Suzuki but the plan was changed later.

The change was, however, opposed by institutional investors forcing the company to seek minority shareholders’ approval on the matter.

Last year, under pressure from institutional investors, Maruti Suzuki had decided to seek minority shareholders’ approval after tweaking some of the earlier proposals for the controversial Gujarat plant, which its parent Suzuki Motor Corp (SMC) had decided to take over from it.

Maruti Suzuki India had initially planned to set up a new plant in Gujarat, its third, to meet the growing demand. However, in January last year, parent Suzuki Motor Corporation announced it would invest $488 million to build the Gujarat plant.

Opposing the move, Maruti’s institutional investors approached capital market regulator Securities and Exchange Board of India (Sebi), seeking its intervention to safeguard the interests of minority shareholders.

Private sector mutual funds and insurance companies, which own almost 7 per cent of the company, led the opposition.

The company’s Gujarat plant is envisaged to have a total installed capacity of 7.5 lakh units annually. It is expected to be operational by May 2017.

At present, Maruti Suzuki India’s two units at Gurgaon and Manesar have a total production capacity of 1.5 million units annually.

PTI