Business

Suzuki takes control of MUL

By Our Special Correspondent

NEW DELHI MAY 30. India's automobile major, Maruti Udyog Ltd. (MUL), today turned a truly private venture, with Suzuki Motor Corporation of Japan moving in to take over the reigns of the company after handing over a pay order for Rs. 1,000 crores to the Indian Government which had offered to privatise the entity started as a public sector venture. Suzuki has now gained majority stake and acquired management control over the joint venture.

At an impressive function marking the fructification of the efforts of the Government which has been keen on privatisation of the erstwhile PSE, the Suzuki Chairman, Osamu Suzuki, presented the pay order to the Heavy Industries Minister, Suresh Prabhu. The moving spirit behind the present Government's privatisation plan, the Disinvestment Minister, Arun Shourie, was also present on the occasion.

The function witnessed the Japanese company's stake go up to 54.2 per cent even as it was announced that MUL would continue to be run as an Indian company with full support from its parent and would launch at least one model every year.

Even as the exercise of privatisation of MUL was completed, another announcement from the new masters was that Jagdish Khattar was being retained as the Chief Executive of the company. He has been reappointed Managing Director as a nominee of SMC in the MUL board which would have eight SMC representatives and two part-time government nominees in K. K. Jaswal and Pradeep Kumar.

MUL's investment plans would for the time being remain the same — it would invest Rs. 200-250 crores in a die-cast foundry for greater localisation of automobile components. Mr. Suzuki, however, declined to share details of the upcoming models.

While Mr. Prabhu said privatisation of MUL would attract investments in India, especially in the automobile sector, Mr. Shourie said the agreement reached between the Government and Suzuki Motor Corporation would be looked upon as an example in future.

It may be recalled that the Government had approved disinvestment in Maruti Udyog through a two-stage process commencing with reduction of its stake in the joint venture to 45.4 per cent from 49.7 per cent, for a premium of Rs. 1,000 crores to give majority stake to Suzuki Motor Corporation by not subscribing to a Rs. 400 crores rights issue.

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