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No executive powers for key Maruti panels headed by Saito

The industry ministry is working towards according only advisory powers to the newly-formed purchase and marketing sub-committees in Maruti Udyog Limited and keep the implementation part out of the purview of the two bodies.

''The ministry is preparing an order by which the committees would have only advisory powers. They would be only allowed to advise on the purchase and marketing aspects while the implementation part would not be under their control,'' informed sources said.

''An action plan is being drafted and orders regarding the same would be issued shortly,'' the sources added.

These sub-committees were formed subsequent to the compromise formula reached between government of India and Suzuki Motor Corporation, equal partners in MUL.

As per the agreement between the two partners, part-time Chairman Y Saito was to head both the committees, who would look into all the aspects of purchasing components and other materials as well as marketing the vehicles produced -- the two key functions involving large financial transactions.

According to the sources, some of the government directors on the board had pointed out that certain legal hiccups in the formation of these panels, particularly on the extent of powers that could be vested with the proposed panels.

It may be recalled that under the Articles of Association of MUL and the Companies Act 1956, Managing Director R S S L N Bhaskarudu shall be the chief executive officer of the company vested with substantial powers of management, including that of marketing and purchases.

Incidentally, Y Saito, being the part-time chairman, does not have any executive powers and, moreover, by heading the two sub-committees, he would have stripped Bhaskarudu of all powers.

Besides, under the AoA of MUL and the Companies Act, the managing director of the company is held responsible for any act of omission or commission.

Thus, in the case of the panels running the two crucial affairs of the company, it was pointed out that they can easily escape any responsibility for any acts of omission or commission unless there is any change in the AoA or the Act in this regard.

The directors have further pointed out that the sub-committees could be assigned the task of forming specific guidelines on the decision-making process in the two areas while the implementation part should be left to the board.

According to the Suzuki proposal, while the scope of the panel on purchasing would include mainly appointment and termination of vendors and framing of trade conditions with them, the sub-committee on marketing would look into the appointment and termination of dealers and framing trade conditions with them.

Meanwhile, both Industry Ministry Sikander Bakht and Minister of State for Industry Sukhbir Singh Badal have categorically stated that the government's stake in Maruti would not be reduced below the present level of 50 per cent.

This assurance was instrumental in the calling-off of the strike by Maruti Udyog Employees Union. The union on July 11 deferred their one-day token strike following the assurance by the ministers that the workers' interests would be protected.

The employees were protesting against the alleged ''illegal'' agreement reached between government of India and Suzuki Motor Corporation of Japan, equal partners in the Rs 85 billion car manufacturing joint venture.

UNI