value. The impact of any direct or indirect taxes on account of the contract manufacturing agreement would be assessed before finalising the agreement and as earlier stated, the Gujarat subsidiary would function on the basis that it would neither generate surpluses nor make losses,” the statement said.
Maruti Suzuki chairman RC Bhargava said three-fourths of minority shareholders, who hold 44% stake in the company, would have to approve the proposal through a special resolution.
The special resolution would not see Maruti or Suzuki directors voting on the proposal, as they are ‘related party’. “We are not required by law to seek minority shareholders' approval but the board decided to do so as a measure of corporate governance," Bhargava said.
An independent director on the Maruti Suzuki board told FE that voting by the minority shareholders is likely to happen in the next two months when the detailed arrangement between Maruti and parent Suzuki is ready. We are happy with the board decision taken on Saturday. It is our role to take up issues on behalf of minority shareholders and this decision should squash all speculation about independent directors just giving their rubber stamp. We believe this arrangement will be beneficial for the company and its shareholders, but if there are doubts, it is necessary to address them. The worry that any party is trying to push through an agreement is over. Minority shareholders now have a chance to express their concerns,” he said.
The controversy regarding the Gujarat plant started when on January 28 Maruti announced its board has decided that it would be owned and built by SMC at an investment of around R3,000 crore.