Koyo Seiko Co, which is the second largest producer of steering systems in the world, increased its stake after a preferential issue by Sona Steering.

With the increase in foreign equity, the company's board is being reconstituted and will include two Japanese directors. Koyo has nominated T Masuda as the resident technical director to assist the company on the technical front. Sona Steering's board has already approved Masuda's appointment.

Sona Steering, the flagship company of the Sona group promoted by Surinder Kapur, has sought government approval under Section 21 of the Companies Act, 1956. It is also moving a resolution to seek approval of the shareholders at the company's annual general meeting (AGM) to be held on September 4.

Earlier, Koyo Seiko wasallotted 12,00,000 equity shares of Rs 10 each at a premium of Rs 82 per share on a preferential basis. The joint venture which started off as a technical collaboration for the manufacture of manual steering gear assemblies and steering column assemblies in January 1985, was converted into an equity venture in July 1992. In July 1995, Sona Steering Systems entered into a technical collaboration with Koyo Seiko Co Ltd for the manufacture of power steering gear assembly.

Sona Steering manufactures steering gears, steering columns and drive-line products. The company has recently started the manufacture of power steering and will concentrate on it.

Sona Steering plans to become a global source for manual steering systems for Koyo Seiko and to manufacture hoses and pumps for the automotive industry. The company is setting up additional facilities at Pune and Chennai. Its customers include Maruti Udyog Ltd, Daewoo Motors India Ltd and Eicher Motors Ltd. By the turn of the century, Sona Steering expects toincrease exports to 10 per cent of its sales.

The other group companies include Mahindra Sona Ltd, Sona Somic Components Ltd, Sona Matsuda Cold Forgings Ltd, Sona Okegawa Precision Forgings Ltd and Sona Software Ltd.