At least seven fund houses have raised a red flag over Suzuki's plan to set up a manufacturing facility in Gujarat and asked for a "rethink", arguing that the move is "neither fair" nor in the interest of its 56%-owned Indian arm, Maruti Suzuki, and its minority shareholders.
Axis Mutual Fund, DSP Blackrock, HDFC MF, Prudential ICICI, Reliance MF, SBI MF and UTI, which are shareholders in Maruti Suzuki, have also complained about royalty payments by the country's largest carmaker to its Japanese parent. "Complete clarity and transparency on these issues is needed so that further damage to minority shareholders is avoided... MSIL should do everything possible to ensure that this trust is restored and maintained for ever," the fund houses said in a joint letter to the Maruti Suzuki chairman last week.
On Jan 28, the company's board had announced a decision to let Suzuki Motor Corporation set up a 100% subsidiary in Gujarat. Maruti Suzuki will source products from this facility, it had said.
Axis Mutual Fund, DSP Blackrock, HDFC MF, Prudential ICICI, Reliance MF, SBI MF and UTI, which are shareholders in Maruti Suzuki, have also complained about royalty payments by the country's largest carmaker to its Japanese parent. "Complete clarity and transparency on these issues is needed so that further damage to minority shareholders is avoided... MSIL should do everything possible to ensure that this trust is restored and maintained for ever," the fund houses said in a joint letter to the Maruti Suzuki chairman last week.
On Jan 28, the company's board had announced a decision to let Suzuki Motor Corporation set up a 100% subsidiary in Gujarat. Maruti Suzuki will source products from this facility, it had said.
Source: Automobile News
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