A Swadeshi Bailout

THE dust never settles at Maruti Udyog Limited (MUL). After taking a severe beating at the hands of Sikander Bakht, the BJP-led government's industry minister, MUL managing director R.S.S.L.N.

Bhaskarudu seems to be paying the government back in its own coin. Bhaskarudu, whose tenure as MUL MD has been sacrificed by the government, has finally found an ally in Swadeshi Jagaran Manch (SJM), the firebrand socio-economic pressure group of the BJP. SJM has questioned the sanctity of the out-of-court settlement between the Government of India and Suzuki Motor Corporation.

SJM seems to have picked up where the Left parties, protesting the agreement, had left off last month. In a representation made both to the government and Suzuki, the manch says that the accord totally ignores MUL's and India's interests. In SJM's view, the government's decision to sign the agreement was completely unwise and also an unconditional submission to Suzuki dictates. SJM leaders say the government-Suzuki accord on MUL reeks of foul play as it furthers the interests of Suzuki alone. "With this decision, the board is now dominated by people who are directly and indirectly favourably disposed towards Suzuki," it adds.

The BJP-led government, unable to handle its own front organisation, is at its wit's end. Facing a recharged Opposition in Parliament following SJM's open expression of dissatisfaction, Bakht sought to take refuge under an emotionally-charged defence. "I am an 80-year-old man and this is how people treat me," he cried. The Opposition, demanding a joint parliamentary committee probe into the deal, staged a walkout when the ruling party failed to answer the issues raised by them.

But SJM is not impressed. Says P. Murlidhar Rao, its all-India organiser: "Sikander Bakht has emotionalised the issue. Instead of arguing his case on the basis of facts and logic, he is succumbing to emotional sensitivities." Although it refuses to accept that the accord was a total sellout, SJM leaders say it amounted to handing the company to Suzuki on a platter. Says an SJM leader: "This is not a sellout like the dilution of equity under the Congress government, but it amounts to the same as Suzuki has been given a free hand to manipulate India's most popular and profitable public sector company to promote its own interests."

According to SJM, the negotiated settlement reached out of court on June 6, 1998, between the two equal partners is unequal, is based on not so sound business principles and is devoid of any rationality. The agreement, it seems, has not been prepared keeping in view Indian national and consumer interests and has made MUL a captive company to serve Suzuki interests.

Says Rao: "In the agreement, Suzuki has obtained more than it demanded and the government has asked for nothing. It has never been put on record in writing as a result of which it will not be binding on Suzuki to promote the interests of MUL and the country." The government's plug has been that the accord had been reached keeping in mind the larger interests of the country and that the previous government was committing a mistake in equating the company's interests with the interests of the nation.

Counters Rao: "MUL's strength is its 82 per cent marketshare in India, which the government has never used to bargain its position. One can buy technology but not an 82 per cent marketshare." What SJM finds most objectionable is that the government has accepted Suzuki's supremacy not only in technology matters but also in the day-to-day and long-term management of MUL.

Above all, says Rao, the pact is likely to disturb the balance of power within MUL as an MDhas been nominated two years in advance and is functioning as a parallel power centre within the company. "If Mr Bakht runs a company himself, can he afford to have a sitting future MD when another one is still there? Is this a sound business proposal?" asks Rao. While Bhaskarudu refused to comment on the issue, some MUL officials assert that SJM had taken up cudgels against the government on its own.

SJM has given the government a deadline to review its decision after which "its protests will go beyond the intellectual level". According to SJM, review was essential on a few issues. Primary among these were technology transfer and manufacture of critical components. In the past, the manch has been a handy tool for the BJP to mount its attack on other governments, but this time with the SJM training its guns towards the BJP itself, can it tame its own Frankenstein?