 "Osamu Suzuki to attend Maruti board meet on Saturday")
The meeting comes in the wake of the Securities and Exchange Board of India seeking information from Maruti Suzuki on the financing arrangement for the Gujarat project announced on January 28.
In a letter dated March 5, four insurance companies and 12 mutual funds had opposed the car maker’s decision to allow Suzuki to set up a fully-owned manufacturing unit in Gujarat, terming it a “blatantly wrong and value-eroding oppressive transaction”, which would turn Maruti Suzuki into a “shell company”. The shareholders said they failed to see how the deal would benefit the Indian car maker.
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In January, the Maruti Suzuki board had cleared a complex proposal to set up new manufacturing units in Gujarat through a fully-owned subsidiary of parent Suzuki Motor Corporation. It was proposed Maruti Suzuki would buy cars from the newly-formed company. “We wish to remind you of your fiduciary duty and urge you to carry out the Gujarat project under the ownership of Maruti Suzuki India,” the investors and insurance companies said in a second letter to the Maruti management. This letter also sought to know whether the proposal on the Gujarat plant had come from Suzuki and whether the company had considered other alternatives.
“Please let us know whether the board invited such a proposal or if it merely accepted an unsolicited proposal made by Suzuki. Further, please confirm whether the veracity and validity of Suzuki's proposal was benchmarked with other alternatives/market rates in order to arrive at a view that the proposal was the best option,” the letter said. It added a press release following the first letter in this regard didn’t address all their questions.