Top mutual fund houses and insurance companies that cumulatively hold about 7 per cent stake in Maruti Suzuki India Ltd (MSIL) have approached SEBI on the matter of the automaker’s Gujarat plant.

All the 16 institutional investors, who had a few days ago shot off a letter to the MSIL board opposing its decisions on the Gujarat plant, have now sought SEBI’s intervention to secure the interests of minority shareholders.

Appeal to SEBI A letter addressed to SEBI Chairman UK Sinha and signed by representatives of all the 16 institutional investors has been sent to the regulator, industry sources close to the development said.

MSIL is now facing shareholder activism from these 16 institutional investors who contend that the decision to let Suzuki Motor Corporation implement the Gujarat plant through a subsidiary was “ill-conceived” in its entirety.

Life Insurance Corporation, which holds 6.93 per cent stake in the automaker, has largely remained a passive investor and is unlikely to join forces with these 16 institutional investors, it is learnt. Meanwhile, they are trying their best to bring LIC on board to oppose the MSIL board decisions.

Speculation is rife that the MSIL board will meet on Saturday to discuss, among other things, the ongoing controversy over the Gujarat plant decision.

MSIL has, however, not sent any communication to the stock exchanges about the board meeting.

New Company Law The 16 institutional investors may find it difficult to get their way on this issue if they were to look at a remedy through the provisions of the Company Law.

This is because they need to control at least 10 per cent shareholding in MSIL or get 100 shareholders to move the Company Law Board for a case of oppression or mismanagement.

The new company law provisions for securing the minority shareholders’ interest are yet to be notified.

Till the new provisions are operationalised, the provisions under the Companies Act 1956 will prevail, say company law experts.

Related Topics
comment COMMENT NOW