Talks begin on MUL divestment

New Delhi, Nov 30: Representatives of Suzuki Motor Corporation SMC have begun discussions with government on disinvestment in the joint ...

New Delhi, Nov 30: Representatives of Suzuki Motor Corporation SMC have begun discussions with government on disinvestment in the joint venture auto company Maruti Udyog MUL, where the two partners have 50 per cent equity each.

After consultations with their headquarters in Japan, SMC representatives met government officials here yesterday in connection with the latteracirc;euro;trade;s proposal for divestment in MUL, official sources said here today. A high-level team of SMC is also understood to have arrived in Delhi today for continuing the dialogue, sources said, adding that acirc;euro;oelig;SMC communicated its willingness to discuss and we are positive about their response.acirc;euro;

SMCacirc;euro;trade;s representative and Director in MUL Junzo Sugimori was not immediately available for comments. Cabinet Committee on Disinvestment CCD had decided earlier this month to constitute a Committee of Secretaries to explore all possibilities with SMC for optimal disinvestment in MUL.

acirc;euro;oelig;SMC team is open to discussions on the various alternatives available to the government to disinvest its stake in the joint venture company,acirc;euro; sources said while pointing out that government had given at least five alternatives to the Japanese partner on the issue.

Another round of discussions is slated to take place in a day or two on the same issue, sources added. The terms of the JV agreement stipulate that both parties have to seek the written consent of the other party before effecting a change in the shareholding pattern in the company, which currently has about 55 per cent share in the countryacirc;euro;trade;s car market.

The government had suggested that either SMC should buy out the other partner in MUL or vice versa, sources said, adding that other options included selling it to public through initial public offer or to financial institutions. The government also proposed that a third party could be given the entire or part stake, sources said.

Sources said that SMCacirc;euro;trade;s response should be formalised soon as the issue was slated to be taken up at the meeting of the Cabinet Committee on Disinvestment, headed by Vajpayee.

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At the last meeting CCD had asked the CoS, which included secretaries in the Ministries of Heavy Industry, Disinvestment and Expenditure, to complete consultations with SMC within a fortnight. However, the process got delayed on account of certain differences between the ministries of Heavy Industry and Disinvestment.

As part of efforts to prepare the MUL for divestment, the government has also initiated efforts to bring industrial peace at MUL where workers have taken to the street for nearly two months.

Although the situation of acirc;euro;tilde;status quoacirc;euro;trade; exists at the MUL factory premises now, the chances of peace have brightened with Heavy Industries Minister Manohar Joshi informing Parliament that the management would not insist on individual workers signing the contentious good conduct undertaking.