Maruti dismisses concerns on Suzuki directly investing in EV project

Maruti Suzuki has dismissed concerns raised by proxy advisory firm IiAS on Japan' Suzuki Motor directly investing in the EV project in the country, Maruti Suzuki Chairman RC Bhargava told PTI, asserting that there was nothing in it against the interest of the company and its shareholders.

Proxy advisory firm IiAS has raised concerns and questions regarding the decision of the Suzuki Motor Corporation (SMC) to invest directly in the EV project in the country instead of doing it through MSI.

Bhargava also noted that all models produced at Suzuki Motor Gujarat (SMG), including EVs, will ultimately be sold by Maruti Suzuki India (MSI) in the Indian market. "This proxy firm had also come out against the establishment of the Suzuki Motor plant in Gujarat. The shareholders overwhelmingly rejected the advice of the proxy firm," Bhargava said.

He added that the deal had already been approved by the shareholders and there was nothing new to be opposed to or worried about. “It is already a done deal, this is not a new thing. I don't know why they (IiAS) are opposing it. The cars made in Gujarat will be supplied to Maruti at a cost, we will sell the car, that is the arrangement approved in 2014," he explained.

On March 20, SMC announced an investment of around ₹10,445 crore through 2026 for local manufacturing of battery electric vehicles (BEV) and batteries in Gujarat. The company has signed a memorandum of understanding (MoU) to this effect with the Gujarat government. Under the MoU, the company will invest ₹7,300 crore for the construction of a plant for batteries at a land neighbouring its existing plant.

However, IiAS noted that the larger issue continues to be the inherent conflict of interest between owning a 100 per cent subsidiary and having a listed company in the same market. “These structures make it easier for MNCs to hollow out the listed subsidiary and reduce its value," it noted.