miscellaneous

"Prasad Has No Extra Powers"

Insisting that the appointment of T.R. Prasad as chairman of Maruti Udyog Limited was being overplayed by the press, Managing Director R.C. Bhargava spoke to Outlook even as the crucial meeting of the Rajya Sabha Assurances Committee was in progress.

"Prasad Has No Extra Powers"
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What signal is the Government sending to you by appointing Prasad as chairman?

His appointment is no big deal. The Government is merely exercising its rights. It is the press which is overplaying the issue. Prasad already chairs the company's board meetings and his becoming chairman does not give him any extra powers, nor does it take away any of mine. So I am entirely unaffected. Perhaps, the signal is meant for the Assurances Committee which is meeting today.

Is this an indication from the Government that it would like you to leave?

If the Government and Suzuki, which are 50:50 partners in the company, want me to leave, then both shoulddecide and request me to do so. I will be ready to abide by their wishes.

What if the Government takes the matter to the Company Law Board?

If through the legal process it is established that the allegations merit removal, then so be it. But I definitely wouldn't like to leave under a cloud of such allegations.

The Government says that it can remove you under Section 388(B) of the Companies Act if there are "circumstances suggesting" that the business of the company has not been conducted on sound business principles.

I have to be proven guilty before I am removed. Thankfully, our courts don't hang you without giving you a hearing. If and when the matter is taken up by the Department of Company Affairs, it will need to conduct a proper judicial inquiry, where I will obviously present my case strongly. "Circumstances suggesting" is not enough to merit my removal. The court will have to establish specific grounds for removal.

The Government has threatened to change its nominees on the Maruti board. How do you react to that?

The current fiscal year 1995-96 has been the most successful year for Maruti ever. Clearly, the current management has acted in Maruti's interest. And you can't penalise the management for that. If the government feels that its nominees are biased towards a particular shareholder, the charges have to be proved before they are discharged from their duties.

The joint venture agreement signed between the Government and Maruti envisaged some special rights for Suzuki. Why?

Suzuki was given special rights in 1982, and the rights continued after the joint venture was signed. It is nothing unusual. Any foreigner who invests in India gets special rights. In 1981, no one was willing to invest money in Maruti, Suzuki did, and thus got the special rights.

Would you say that the Government has dragged its feet in the renewal of the licence agreement?

The licence agreement for the Maruti 800 expired in November 1992, for the Gypsy it expired in December 1993. The board passed a resolution agreeing to the renewal of the agreement in September 1995. But there is still a dispute with the Government on the time from which the agreement is to be renewed. I hope it will be resolved soon.

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