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|August 16, 1999||
Bhaskarudu quits Maruti, Khattar in driver's seat
Maruti Udyog Limited managing director R S S L N Bhaskarudu today submitted his resignation to the company's board of directors following his appointment as member of the Public Enterprises Selection Board.
He will relinquish his charge at the end of business hours on Tuesday August 17, after 16 years of service in the country's largest passenger car manufacturer. Bhaskarudu had joined MUL on December 9, 1983 and had taken over as managing director on August 26, 1997.
Bhaskarudu's resignation paves the way for the company's second managing director Jagdish Khattar to be in the driver's seat.
Bhaskarudu told select media-persons in New Delhi that he had apprised the Maruti Board at its meeting in Hungary about the government's order appointing him as a PESB member and expressed his desire to be relieved.
He would take up his new assignment from August 18,1999.
Bhaskarudu's tenure as MUL managing director was mired in controversy as Suzuki Motor Corporation, the equal partners in the joint venture had strongly opposed his appointment. On the other hand, the government insisted on his appointment. The issue was resolved by the BJP-led government.
His exit comes five months ahead of schedule.
The row over his appointment was resolved when the BJP-led government reached a compromise with SMC and cut short Bhaskarudu's tenure as managing director and decided to appoint Khattar to the post from January 1, 2000.
No name has been recommended as yet to the post of a whole-time director to replace Bhaskarudu. The company's board would meet shortly to ratify Khattar's appointment as the managing director as also to appoint the new director.
Regarding his new assignment, Bhaskarudu said, ''I am always happy and I continue to be happy. It was an open order asking me to join as and when I wanted. But I decided to join as soon as possible.''
Regarding his tenure as the managing director of the country's largest car-maker, Bhaskarudu said the company has, under him, achieved whatever was aspired for. ''We are in the process of introducing new models and have also built good productivity levels in the company. The new models are now in various stages of introduction.''
He also expressed optimism over the future of the company saying ''it is very bright''. The company will, despite the onslaught of competition, maintain an over 65 per cent market share in future.
Regarding the efforts to make all its vehicles Euro-II compliant, he said it would put an additional cost burden on the company but the exact impact of the same is yet to be ascertained. ''It is definitely an additional cost but the extent to which it would be passed on to the customers would be debated at the time of launch.''
Bhaskarudu, however, parried questions on the previous tense relations between the two equal owners of MUL as also on disinvestment of government holding in the company.
The 20 per cent drop in net profit notwithstanding, the board of directors of MUL has maintained a 30 per cent dividend for the fiscal 1999-2000, resulting in a total outgo of Rs 400 million.
The proposal was recommended at the company board meeting held in Hungary earlier this month, Bhaskarudu said.
''The proposal would now be taken up at the annual general meeting for ratification,'' he added.
The company's bottomline had been severely affected in the 1998-99 fiscal due to the major price cuts announced on its models.
MUL earned a profit after tax of Rs 5.23 billion for the financial year over Rs 6.52 billion the previous year. Following a similar pattern, the profit before tax was down by 19.85 per cent to Rs 7.83 billion from Rs 9.77 billion.
The total income also took a dive to Rs 81.18 billion from Rs 84.74 billion, losing ground by 4.20 per cent. Faced with difficult market conditions and pressure on margins, the company's internal generation went down to Rs 6.68 billion from Rs 7.93 billion.
Despite a drastic cut in prices of most of its models, MUL's total sales of vehicles during the year had declined to 309,094 units from 327,264 units. Production was down to 332,931 units from 354,336 units.The company resorted to a production cut of 20 per cent in November 1998. Exports too suffered and dropped to 24,410 units as against 25,994 units the previous year.
Interestingly, the company managed to show increase in its net worth by 23 per cent which improved to Rs 26.06 billion from Rs 21.23 billion.
Maruti forms JV with Sumitomo, Countrywide Finance for used cars biz
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