Institutional investors with seven-per cent stake in Maruti Suzuki India Ltd ( MSIL) approached the Securities and Exchange Board of India (Sebi) on Thursday with the request to safeguard the interests of minority shareholders in the country's biggest car company.
According to sources, representatives of 16 private mutual funds and insurance companies met senior Sebi officials and submitted a memorandum addressed to chairman U. K. Sinha over MSIL's decision to transfer the proposed Gujarat car plant to Japanese parent Suzuki Motor Corporation.
Life Insurance Corporation of India (LIC) has separately sought clarifications from the MSIL management as it holds a 6.93- per cent stake in the car major. The institutional investors, which include ICICI Prudential MF, Reliance MF, L& T MF, UTI MF, SBI Mutual Fund, SBI Life Insurance, Reliance Life Insurance and Religare Invesco, are keen to join hands with LIC to strengthen their case.
Sebi was approached days after the 16 investors wrote to MSIL chairman R. C. Bhargava and other board members seeking quashing of the "oppressive transaction" to save the company from becoming a shell entity.
While a new set of norms proposed by Sebi which come into effect on October 1 requires such transactions to be approved by public shareholders of a listed company, there is some ambiguity about the existing law.
Promoters and related shareholders would not be allowed to vote while seeking approval for such transactions. The new Companies Act also requires related- party transactions to be cleared by public shareholders. If the Maruti deal does not get completed by this month, it would be subject to the new norms.
Courtesy: Mail Today