ISS favours Maruti's plan for Gujarat unit

International proxy advisory firm ISS Proxy Advisory Services has favoured the arrangement between Maruti Suzuki and parent company Suzuki for the upcoming plant in Gujarat. The firm has said it makes good economic sense for the company to facilitate future growth. It also said the company will have shared control in the operations of the plant despite not owning any stake.

Last week, another international firm Glass Lewis had supported the proposal. Under the proposal, Suzuki will invest Rs 8,000-10,000 crore in the Gujarat plant and sell all products to Maruti at a no profit-no loss basis. The Gujarat plant is critical to the company's target of selling 2 million vehicles by 2020.

The Indian proxy advisory firm Iias had opposed the plan saying Maruti will lose control over its destiny. Maruti Suzuki is in the middle of a voting by minority shareholders for its upcoming Gujarat plant. The voting process of minority shareholders on Gujarat plant started on November 16 and the results are slated to come on December 17.