Little progress seen in MUL disinvestment

Ravi Kapoor

New Delhi, July 15: Even five months after the government decision to start the process of divestment in Maruti Udyog Ltd (MUL), there has been little progress on the subject.

MUL divestment seems to have become an issue nobody wants to talk about. Officials in the department of disinvestment (DoD) say that the ball is in the court of the ministry of heavy industries & public enterprises, theadministrative ministry for MUL.

Ministry insiders, in turn, argue that MUL divestment is the DoD’s baby. “(DoD secretary Pradip) Baijal sahib knows the best about such issues,” heavy industries Ravindra Gupta told The Financial Express. Heavy industries minister Manohar Joshi was not available for comment. Disinvestment minister Arun Shourie and Mr Baijal, too, were not very forthcoming about MUL privatisation.

DoD officials said the administrative ministry continues to stall divestment in MUL.

On February 13 this year, the cabinet committee on disinvestment (CCD) had decided to adopt a two-stage process to offload its equity in MUL. The government was expected to seek the consent of Suzuki Motor Corporation, government’s equal partner in MUL, so that a rights issue could be brought out. In the rights issue, in place of the government, domestic financial institutions would buy a stake.
In the second stage, the government was supposed to offload its equity; FIs were given the option of holding or selling their shares.