DoD moots panel for Maruti sell-off

The reason why cabinet secretary TR Prasad has been chosen to head the committee is that as former industries secretary he is fully conversant with intricacies of MUL. He played a key role in resolving the dispute between the Government and Suzuki Corporation, the equal partners in MUL.

As per the DoD proposal, the three-member committee would comprise the DoD secretary and the secretary of the ministry of heavy industries & public enterprises, which is the administrative ministry for Maruti. The committee would submit its report to the CCD within a month of its formation, said sources at the ministry of heavy industries & public enterprises.

The proposed committee may also take the help of merchant bankers.

It would explore various options for the sale of government equity in MUL, including public sale of government shares. While the first right of refusal remains with Suzuki, the government is open to the idea of selling its stake in MUL to an Indian company or a global major.

According to the DoD, Maruti divestment is a fait accompli. For, the company needs money for technological upgradation, whereas the government is not willing to inject more money as it goes against the official policy of getting out of commercial activities.

So, in order to keep the company in good health in an increasingly competitive market, divestment in MUL cannot be put on hold for long. This, according to official sources, is the rationale provided by the DoD.

It may be recalled that minister of heavy industries & public enterprises Manohar Joshi has been against divestment in MUL. However, he has given his nod for the setting up of the three-member committee, sources said. The fact that Prasad would head the committee made Joshi soften his stand on Maruti divestment.

The department of disinvestment is circulating a note for MUL divestment and we will discuss it when it comes to us, Joshi said here on Tuesday. He said he was open to examine the proposal for divestment in MUL.

While disinvestment minister Arun Shourie was tight-lipped over developments in MUL divestment and his secretary Pradip Baijal, could not be contacted despite repeated attempts, officials at the ministry of heavy industries said that Joshi might agree to MUL divestment if employees’ interests are properly taken care of.

The sources also told The Indian Express that Joshi decided to intervene in the labour unrest at MUL only after he got convinced of the argument that the Government should get out of the company.