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September 24, 1997


Govt files caveat in Maruti case in SC, Delhi high court

In a significant development, the central government on Tuesday filed caveats in the Supreme Court and the Delhi high court, preempting any move of the Suzuki Motor Corporation challenging the single bench order of the high court.

Government sources confirmed that the caveats were filed separately in the apex court and the high court on Tuesday.

Justice C M Nayar had on Monday dismissed the petition of Suzuki for a stay on the holding of Maruti Udyog Limited's annual general meeting and made the appointment of R S S L N Bhaskarudu as managing director subject to the final ruling of the International Court of Arbitration.

Later in the evening, Bhaskarudu's appointment was ratified at the AGM with Maruti Chairman Prabir Sengupta exercising his casting vote.

The government is understood to have preempted any move by Suzuki to challenge the ratification of Bhaskarudu as managing director and the high court's judgement.

The warring partners -- the Indian government and Suzuki Motor Corporation, had disagreed on all issues concerning the joint venture at the stormy AGM which lasted for about seven hours.

Sengupta had told newspersons on Monday night that the Suzuki nominees had opposed the appointment of Bhaskarudu as managing director. As there was a tie on the issue, Sengupta exercised his casting vote to obtain the approval of the AGM for Bhaskarudu's appointment.

The Suzuki nominees had also withdrawn the resolution pertaining to the appointment of R C Bhargava as the company's chairman.

The resolution relating to the passing of accounts was also passed with Sengupta exercising his casting vote and Suzuki objecting to the same.

Stating the ministry of industry's move to appoint Bhaskarudu was ''arbitrary and unreasonable,'' the company said it believes that Bhaskarudu will not enable Maruti to face domestic or international competition and to expand or grow ''in the absence of an acceptable, capable managing director."

Suzuki, the statement said, had major objective criteria for assessing the merits of a suitable candidate for appointment as managing director of Maruti Udyog Limited.

''These include professional integrity, honesty and fairness, comprehensive management capabilities, capability to maintain and co-ordinate a good relationship with both the government and Suzuki, and the ability to pursue solely the best interests of Maruti.''

Suzuki equivocally holds the opinion that Bhaskarudu is not acceptable to it for the post of managing director on these objective criteria and on the basis of an analysis of his relative strengths and weaknesses in the overall management ability. The assessment was based on his past track record, the company's future plans, its comprehensive strengths and weaknesses, the lack of skills to face competition imminent in the near future, and for several other reasons.

Suzuki had expressed to the ministry of industry on several occasions its views that Bhaskarudu was not acceptable to SMC as the managing director.

The statement further said, ''SMC bona fide believes that in the larger public interest and in the interest of protecting its investments and the investments of the government of India, and the consumer interest in the context of technological advances and impending competition, the actions of the ministry are not in accordance with sound principles, and are arbitrary and unreasonable.''

The Japanese company described the Delhi high court's judgement as ''fair'' and ''just.'' The high court has evolved a proper procedure of subjecting the appointment of Bhaskarudu to the award of the International Court of Arbitration, London, in the context of an interim relief application.

"There is no final determination on this issue and it is a subject matter of final arbitration in London,'' the statement added.

ICA ruling binding, but not enforceable

Maruti AGM ratifies Bhaskarudu's appointment
Maruti tangle could affect performance, say analysts
Bhaskarudu: The man Suzuki loves to hate
Bhaskarudu can stay till ICA verdict, rules Delhi HC
Suzuki can leave Maruti, says industry minister
Showdown with Suzuki!
A successful marriage goes to court
India good testing ground for the global auto market
Suzuki takes govt to court over Bhaskarudu's appointment
Bhaskarudu takes over as MD of Maruti
Bhargava's secrets of success

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