LIC not guaranteed position on Maruti board
03 Jul 2007
New Delhi: The Life Insurance Corporation of India, which will become the second single largest shareholder in Maruti Udyog after parent Suzuki Motor Co may not be guaranteed a position in the auto maker's Board despite having a 14.5 per cent stake.
Suzuki Motor Co chairman and CEO Osamu Suzuki said that as per the article of association there is no guarantee that any shareholder holding above 10 per cent becomes eligible for a Board position.
LIC had increased its stake in the country's largest carmaker to 14.5 per cent from 8.1 per cent when the government divested its 10.26 per cent residual stake in the company earlier this year.
In May, LIC had cornered 1.3 crore shares of the total 2.96 crore that were put on the block by the government to fully exit from the most successful car venture of the country.
Although, LIC has received all other necessary approvals for increasing its stake in MUL, it still has to get the final nod from shareholders of the carmaker at the annual general meeting to be held in September. Actual transfer of erstwhile government shares to LIC will take after the AGM.