New Delhi: Raising fresh concerns over Maruti allowing parent Suzuki to undertake a Gujarat project on its own, institutional shareholders have asked the carmaker's board to quash this "oppressive transaction" to save the company from becoming a "shell" entity.
Seven mutual fund investors in Maruti Suzuki India Ltd (MSIL), who had earlier written to company Chairman R C Bhargava about their concerns over the deal, have now been joined by nine other institutional investors.
These include insurance companies holding MSIL shares and mutual funds. State-run LIC has separately sought clarification from the company over the deal. Institutional investors together hold almost 14 percent in MSIL, while the promoters have a 56.21 percent shareholding.
The institutional investors said they are concerned the decision of MSIL's board in January to let Suzuki Motor Corporation implement the Gujarat project to expand production facilities through a 100 percent subsidiary would convert Maruti into a shell company over time.
"This clearly is not in the best interest of MSIL and its shareholders and is in fact significantly detrimental to them," they added in a letter to the company management.
