Maruti investors oppose Suzuki’s plant in Gujarat — The Times of India

29 Янв 2015 | Author: | Комментарии к записи Maruti investors oppose Suzuki’s plant in Gujarat — The Times of India отключены
Suzuki GNX 250 E

Maruti investors oppose plant in Gujarat

The basic of the unhappiness about Suzuki’s is that it will allow the company to divert its India from a company it only owns to one it wholly owns, it can then repatriate home.

The has posted comments on this TNN | Feb 24, 2014, 04.20AM IST


NEW DELHI: At seven fund houses raised a red flag over plan to set up a manufacturing facility in and asked for a rethink, arguing the move is neither fair nor in the of its 56%-owned Indian arm, Suzuki, and its minority shareholders.

Axis Mutual Fund, DSP HDFC MF, Prudential ICICI, MF, SBI MF and UTI, which are shareholders in Suzuki, have also about royalty payments by the largest carmaker to its Japanese Complete clarity and transparency on issues is needed so that damage to minority shareholders is MSIL should do everything to ensure that this is restored and maintained for ever, the houses said in a joint to the Maruti Suzuki chairman week.

On Jan 28, the company’s board had a decision to let Suzuki Motor set up a 100% subsidiary in Gujarat. Suzuki will source from this facility, it had

The decision was thumbed down by with the stock falling 8% it has recovered since).

The basic of the unhappiness about Suzuki’s is that it will allow the company to divert its India from a company it only owns to one it wholly owns, it can then repatriate home.

It was Suzuki which was originally to set up the plant.

Suzuki GNX 250 E

Life Insurance of India. the largest institutional with close to 7% stake, has sought details of the strategy, a company executive said.

In letter, the fund houses questioned the need for Suzuki to directly in the Gujarat plant as is sitting on a pile of cash, added up to over Rs 7,000 at end-September and is projected to rise to to Rs 25,000 crore by 2015-16. . Rs 3,000 crore is needed to be by FY17 (2016-17) in proposed facilities. MSIL (Maruti thus already has more than what the business the letter said.It suggested Maruti will transition being a manufacturing company to a outfit if Suzuki goes with its decision.

Starting with Suzuki’s to set up an independent assembly plant in the fund houses have three other instances decisions were perceived to be not to Maruti Suzuki and its shareholders. The to set up Suzuki Powertrain India to diesel engines and its subsequent with Maruti, resulting in a 2% in Suzuki’s stake in the Indian is another sore point. The issue of a change in royalty still irks them.

The mutual funds have that minority shareholders got a raw deal over the past few as Suzuki walked away high royalty payments. pays 5.7% of the sales as to Suzuki for using its technology, is estimated to have resulted in an of Rs 7,000 crore over the four years. The investors said that royalty up to nearly 40% of Maruti’s operating which was in addition to the Rs 550 crore paid to Suzuki and Rs 400 crore to shareholders.

Without questioning the rationale for payments, the fund houses said that a large of the value of a car comprises components as swats, tyres, mirrors and for which vendors already pay or incur expenses on research and It is thus not fair to levy on the total sale value of the Ideally, royalty should be on the value of a car net of the bought-out components, the said, adding that the royalty and RD spend of Maruti added up to nearly 7%.

In contrast, the shareholders said, Moto Corp paid of sales to Honda, while SKF 1.2% and Bosch 1.5%.

Suzuki GNX 250 E

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