Govt Sets Terms For Backing Down On Bhaskarudu As Md
The government is willing to withdraw support to Maruti Udyog Ltd managing director RSSLN Bhaskarudu only if Japanese partner Suzuki Motor Co is able to provide concrete proof that he is incapable of tackling the challenges facing Maruti Udyog.
This was indicated during a recent series of discussions between the government and the Suzuki Motor brass, led by SMC vice-president Y Saito. The government has also offered to withdraw its nominee, P Sengupta, from the MUL chairmans post if SMC accepts Bhaskarudu as the managing director, unless SMC is able to prove that Bhaskarudu is incapable of doing justice to his responsibilities.
However, government sources said Suzuki has still not been able to produce any concrete evidence which could threaten Bhaskarudus position. Sources added that the government has made it clear to Suzuki nominees that it is the governments turn to nominate the managing director, and any compromise can be achieved only if Suzuki concedes the governments right to do so.
The government took this stand in response to a letter from SMC, contending that according to the joint venture agreement, the government must seek Suzukis concurrence and respect its wishes before appointing its nominee as the managing director for five years from 1997.
Saito has hinted that the two shareholders in MUL should settle their dispute outside the international court of arbitration, where the case will be heard soon. The government is also keen on an out-of-court settlement. However, a common solution to the contentious issues has not been found till now. Saito, who was in India during the Auto Expo last month, is expected to be the chief negotiator on behalf of Suzuki Motor during further talks for an out-of-court settlement.
The next move in the negotiation process is expected to begin once industry minister Murasoli Maran returns to Delhi from Chennai, where he is campaigning at present, and provides the parameters for the negotiations.
Explaining its appointment of Bhaskarudu, the government told Suzuki during the discussions that it chose the senior-most of three internal candidates who fulfilled the criteria listed for the post. The other two candidates were executive director Jagdish Khattar and director, finance, A R Halasyam.
Government sources said MULs profit in 1997-98 is expected to be much higher than the Rs 900 crore notched up in 1996-97. This is expected to strengthen Bhaskarudus claims, which have already been boosted by his success in clinching a favourable wage settlement with MUL workers.