NEW DELHI: Minority shareholders of Maruti Suzuki India have approved a move by the company to let its Japanese parent Suzuki invest and own the upcoming plant in Gujarat.
The shareholders approved the move with 89.75 per cent through a postal ballot that took place from November 16 to December 15.
“Out of the total votes cast by the minority shareholders, 89.75 per cent voted in favour while 10.25 per cent voted against the resolution, ” Maruti Suzuki India Chairman R C Bhargava told reporters here.
A total of 6,58,33,152 votes were cast during the month long voting. While 5,90,84,468 votes were polled in favour of the resolution, 67,48,684 votes were against the resolution.
“The resolution has been passed and passed quite comfortably,” Bhargava said.
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 USD 488 million to build the plant.
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 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 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, MSI 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. MSI’s two units at Gurgaon and Manesar have a total production capacity of 1.5 million units annually. (PTI)
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