On January 10, the Government invoked its rights and appointed Secretary, Heavy Industries, T.R. Prasad as chairman of Maruti. Though this does not in any way undermine Bhargava's powers as managing director (Prasad is a non-executive chairman), it is for the first time in over five years that Bhargava has someone senior to him in Maruti. If that wasn't enough, a more severe calamity hit Bhargava two days later. The Rajya Sabha Committee on Government Assurances asked the Department of Company Affairs (DCA) to submit a report within 15 days on the course of action it intends to adopt on the advice sought by the Industry Ministry for Bhargava's removal. Deposing before the committe, CBI director K. Vijaya Rama Rao said that two chargesheets had already been filed against Bhargava for corruption and two more would soon follow.
But a member of the Assurances Committee, under condition of anonymity, told Outlook that Prasad, who was also summoned by the Committee, seemed keener to depose Bhargava than the committee itself. Even though the committee gave a 15-day deadline to the DCA, Prasad promised the committee that the Industry Ministry would pursue the DCA through the Law Ministry and would, within 10 days, get a recommendation from the DCA on how best to depose Bhargava.
Both moves took Bhargava completely by surprise. Under the joint venture agreement signed between Suzuki and the Government in 1992, both partners are to appoint the chairman and managing director by rotation. While Suzuki nominated Bhargava as managing director for the five-year period 1992-97, the Government never bothered to fulfill its responsibility of appointing a chairman, on the grounds that it never felt the need. After all, Bhargava himself had represented the Government at one point of time. And that's where things stood, till January 10, when Industries Minister K. Karunakaran appointed Prasad as chairman. "Perhaps it is a signal meant for the Assurances Committee which is meeting today," Bhargava was to say later, caught off guard.
As regards the Assurances Committee asking the DCA to submit a report on how to remove him within 15 days, Bhargava wasn't even aware that the Industry Ministry had taken the matter up to the DCA. As far as his information went, the issue was still lying with the Law Ministry.
So why is the Goverment working towards Bhargava's removal, who was till six months back, the Government's and Suzuki's blue-eyed boy? Though both Bhargava and Prasad refuse to even admit that the Government has any such plans, Bhargava sympathisers offer two reasons. Firstly, they say, Bhargava antagonised Karunakaran when he sided with Suzuki and refused to set up a Maruti plant in Kerala. A plant in Kerala would have been invaluable to Karunakaran politically. A miffed Karunakaran is therefore keen on Bhargava's removal.
The second theory goes thus: with several transnational auto giants entering India, the Government is acting on the behest of these lobbies by tormenting Bhargava and thus weakening Maruti. This, however, sounds rather far-fetched.
The most likely explanation may be a combination of the Kerala plant theory and the Rao Administration's sudden pre-election enthusiasm for an anti-corruption drive, which has already indicted several medium-level Government functionaries. MUL's managing director has always been reputed to have had close allies in very high places, so it may make sense to the Government to sacrifice a pawn called Bhargava to score some anti-corruption brownie points. Just as it has suddenly dusted off a decade-old case against Reliance. Just as it concentrated its securities scam ire on one man, Harshad Mehta, and its Bombay blasts posturings on Sanjay Dutt.
And the Assurances Committee has offered the Government just the shoulder it needed to start sniping at the target.
As Outlook goes to press, the prognosis is rather hazy. Suzuki has already strongly opposed the attempt to get rid of its nominated CEO, but the final outcome may depend on how hell-bent the Government is on getting Bhargava out, and how far the Japanese corporation, for whom India is an extremely important market, will go to save one man.
But though the ground may be shifting under the colossus' feet, it's hardly time to write off the wily Bhargava. His best bet—and he will surely be aware of this—will be to stall the proceedings till after the Lok Sabha elections, when new political equations at the Centre may yet let him retire—in 1997—from the company he has taken to commanding market leadership.
