New Delhi: Voting by minority shareholders of Maruti Suzuki India to let its Japanese parent Suzuki invest and own the upcoming plant in Gujarat ended on Tuesday.
The voting through postal ballot took place from November 16 to December 15 while the results will be announced on December 17.
Initially, the Gujarat plant was proposed to be owned by Maruti Suzuki but the plan was changed later with its Japanese parent Suzuki Motor Corporation announcing in January last year that it would invest $488 million to build the plant.
Last year, under pressure from institutional investors, Maruti Suzuki had decided to seek approval of its minority shareholders after tweaking some of the earlier proposals for the controversial Gujarat plant, which it had initially planned to set up on its own.
The change was, however, opposed by institutional investors forcing the company to seek minority shareholders’ approval on the matter. They had even approached market regulator Sebi (Securities and Exchange Board of India) 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.
Subsequently, Maruti Suzuki India decided to seek minority shareholder’s nod. However, the voting was delayed due to changes in regulations and MSI deciding to comply with requirements under the amended Companies Act.
Proxy advisory firm IiAS, asked minority shareholders to vote against the move. It said in its report that if the transaction is approved, Maruti will lose all control over its own destiny, and Maruti’s shareholders will always remain subservient to the interest of Suzuki’s shareholders.
Maruti Suzuki hit back by asserting that it will have full control over upcoming plant in Gujarat despite letting parent Suzuki own and invest there.
The Gujarat plant is envisaged to have an installed capacity of 7.5 lakh units annually. Maruti Suzuki India’s two units at Gurgaon and Manesar have a total production capacity of 1.5 million units annually.
Shares in Maruti Suzuki, on Tuesday, ended 1.11 per cent higher at Rs 4,620.60 apiece on the BSE, whose benchmark Sensex index finished up 0.68 per cent.