Italian two-wheeler giant Piaggio will push for more directors in the board of LML Ltd apart from asking for a greater say in the operations of the scooter joint venture. Piaggio is also planning to make a bid for state owned Scooters India Ltd which is one of the companies identified by the government for strategic divestment up to 74%.-which if successful will give them a second scooter manufacturing base in India.
At the moment Piaggio has three members in the board of LML and the Singhania family has four members, while the chairman is an independent member. However, sources close to Piaggio say that as both the promoters in the company own 23.6% each there is no reason why they should not have equal members in the board.
However sources close to LML point out that under the original joint venture agreement there is no clause by which Piaggio can increase the number of directors in the board. They say that as per the agreement the operational control in the company lies with the Indian management.
At the moment under the agreement any dispute arising in the board can be decided by a casting vote of the chairman of the company.
Sources close to Piaggio also point out that at the moment the operational management of the company is with the Singhanias. Now they will demand more role in the operations of the company at Kanpur.
Piaggio is also looking at the possibility of having a second scooter base in India and has already started discussions with Cooper Lybrand which has been given the mandate to find a buyer for the ailing Scooters India Ltd.
The Italian company is also planning a foray in the motorcycle segment and has strong brands like the "Gillera" for which it was initially having talks with LML. Sources close to LML however say that while the mobike developed for China was offered to them Piaggio later wrote to them to look for technology from other parties as they did not have mobikes which sell in India.
Sources close to Piaggio is ready to fight for maintaining its stake in LML.
