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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 per cent in MSIL, while the promoters have a 56.21 per cent 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 per cent 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.
