Corporate company affairs are to be conducted. On

Corporate Governance is about the ways
the company affairs are to be conducted. On account of principal agent
structure, those who actually own the company are not the ones who actually
manage it, leaving the scope in the hands of management to take decisions which
are more conducive to management rather than for the owners. The world has seen
many scandals in the past on account of excessive powers in the hands of few
sitting on board and actual owners (shareholders) haplessly watching it without
much of the action on their part since the corporate governance code was in the
process of evolving during those times.However during last some years there has
been remarkable change, with the management and owners (shareholders) have
become aware of their responsibilities and both parties know the available



We Will Write a Custom Essay about Corporate company affairs are to be conducted. On
For You For Only $13.90/page!

order now


            To apply principles of
Corporate Governance and fiduciary responsibilities to real life scenario the
conflict between

Managers and Shareholders

Majority and Minority Shareholders

Creditors and Shareholders

Shareholders vs Nonfinancial Stakeholders


and assesswhether there is scope for proactive action in the matter.




Suzuki Motor Gujarat Pvt Ltd was
established in March 2014 as Suzuki’s first 100% Suzuki investment automobile
production company in India. It was located close to Mundra Port to be utilized
as export hub for markets including Europe, Africa and Japan. Vehicles produced
at Gujarat plant will be supplied to Maruti Suzuki and the production lineup is
scheduled to increase according to the market situation. There were land acquisition
issues while starting of the plant which was eased by the Gujarat Government.With Gujarat plant 2
in its initial phase which is expected to start its operation in early 2019,
Suzuki’s production ability in India would be 2 million units to meet the
expanding needs of automobile market in India.


SMG Pvt Ltd – An


Company Name: Suzuki
Motor Gujarat Private Limited (Suzuki Motor Corporation, 100% investment)

Location of Head
Quarters: Ahmedabad, Gujarat

Location of Plant:
Hansalpur, Mehsana

Representative: Naoki Aizawa (former Director and Senior Managing Officer of

Plant site area: 640

Production line:

Production ability
(Plant 1): 2,50,000 units


It has also been announced that SMG –Gujarat would not be public listed
company and would only be a manufacturing unit. All the marketing and expansion
of the dealer network would be taken care of by MSI-India and profits will be
shared by MSI –India, SMC –Japan and SMG –Gujarat.  Logic for allowing SMC –Japan to fund and own
SMG-Gujarat was that SMC-Japan has funds to the extent of 25000 Cr in Japan on
which it (SMC –Japan) was earning less than 1% return. However there is another
view that MSI –India which also has cash reserves to the extent of 7500 Cr
which could have been utilized in setting up of SMG-Gujarat by MSI-India itself
rather than allowing SMCJapan to do it. 
Reaction to announcement by MSI India about setting up subsidiary in Gujarat.
After raising the red flag over a deal between MSI India and its Japanese
parent for the proposed Gujarat project, the car maker’s institutional
shareholders took up the matter and announced that they would be doing
everything in their strides to safeguard their interest. Investors have fear
that the deal would transform MSI India into a distribution company from a
manufacturing one. Investors are concerned about turning this critical and
highly profitable project into a 100 per cent subsidiary of SMC Japan instead
of MSI India. Investors are worrying about the fact that this move would lead
to significant erosion of value for the shareholders. The Stock market reacted
adversely as shares of MSI India lost some 8 odd percentages after announcement
of launch of the Gujarat plant.


of Maruti


Suzuki India Limited, previously known as Maruti Udyog
Limited, is an automobile manufacturer in India. It’s now a subsidiary
of Suzuki Motor Corporation by 56.21%.Company headquartered at New Delhi.Maruti
was established in February 1981 and actual production started in 1983. Its
first model was Maruti800 which was based on model of Suzuki Alto Kei car.At
first, company was started as a car importer company with a license to import
fully build 40,000 unit from Suzuki. Then Maruti started a local production
unit in Gurgaon which was its first production unit with a capacity of 240,000
unit annually. Then it started another unit in Manesar in Gurgaon itself. It
was started in Feb 2007 with a capacity of 550,000 units.


started its 3rd unit in Gujarat plant with a plan of production
capacity of 450,000 annually.The Gujarat plant had six separate assembly lines,
which was be set up in stages, with each having the capacity to produce 250,000
cars per annum. The labor issues in Manesar Plant led to the plan of
constructing the 3rd plant.


from their core automobile industry manufacturing, sales and service they also
diversified to other areas and have different businesses like:-


Maruti Insurance

2000-01 MarutiSuzuki after analyzing the market, found that 33% of customers
spending on their vehicles are on Insurance for repair and maintenance. So
Maruti started its own Insurance by 2002 and had nearly 4 crore customers by
2017. Maruti Insurance Broking Private Limited has alliance with 11 general
insurance companies in India to give most competitive rates exclusively for its
customers. They differentiates its company with additional facilities like
seamless honoring of policy commitments with cashless transactions and service
delivery across the country.


Maruti Finance

Finance was launched my Maruti by 2002. Before that Maruti has a joint ventures
with many backs like HDFC, Citi, ICICI, Kotak etc. But later it’s had a
strategic venture in car financing with SBI and launched SBI-Maruti Finance
which is available in 166 cities across India.