With a recently concluded public offer divesting 27.5 per cent of government equity successfully in Maruti Udyog Ltd (MUL), the company reconstituted its board giving it a more corporate look. Business tycoon Kumar Mangalam Birla, the chairman of Aditya Vikram Birla Group was inducted on the MUL board as an independent director.The Maruti management has also inducted two other independent directors including Amal Ganguli, former chairman of consulting firm Pricewaterhouse Coopers (PwC) and Pallavi Shroff, senior partner at Amarchand and Mangaldas and Suresh A Shroff and Co. Maruti Udyog Ltd’s former managing director R.C. Bhargava has also made a comeback as part time director on the board.The decision was taken during company’s first board meeting after the new management of Maruti took over operations of the company following the public issue which resulted in dilution of the government equity by 27.5 per cent to 17.5 per cent.The meeting was also attended by O. Suzuki, the chairman and CEO of its Japanese parent Suzuki Motor Corporation (SMC) who is presently on a visit to India. To pave the way for new induction, two old directors on the board H. Nagao and M. Atsumi have resigned. The Board has also constituted an audit committee and a shareholders investors grievances committee as mandated by the stock exchanges.On his induction into the board as part time director, Maruti’s former managing director R C Bhargava said “I am renewing my acquaintance with Maruti and I like the idea. Bhargava steered the company for 12 years from 1985 to 1997 and was responsible for Maruti’s rise as India’s topmost automaker. He said that though “I will not have any executive role, I will try to add value to the board’s day-to-day operations.”Other than newly inducted members, the 11 member board of MUL already includes S. Nakanishi (chairman), Jagdish Khattar (managing director), J. Sugimori and S. Takeuchi (both joint managing director), K. Saito, O. Suzuki (part time director) and S.V. Bhave as government nominee.Meanwhile, the shares of car major are expected to be listed on the Bombay Stock Exchange and National Stock Exchange by later this week, MUL managing director Jagdish Khattar said.Khattar was speaking to reporters after the meeting of O. Suzuki with the Disinvestment Minister Arun Shourie. “I have come here to greet the minister (Shourie) about the IPO successfully done,” Suzuki said. However, he declined to comment on the strategy to be adopted by the parent company for Maruti in the future.The Japanese automaker has a majority control of Maruti in which the government had put 25 per cent of its equity on sale through a recently-concluded IPO. The public offer was initially planned for selling 7.22 crore shares along with a green-shoe option to retain a further 10 per cent which was eventually exercised by the government following a massive response thereby increasing the total size to 7.9 crore shares. The public issue had closed on June 19 with a massive oversubscription by 13 times.Following the disinvestment, government holding in the company would fall to 17.5 per cent and the remaining equity would be offered to the public through a second tranche slated to hit the market next year. Owing to the tremendous response from investors, government had decided to rework the quantum of shares set aside for various investor categories in favour of retail investors.
