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India does not have a recall policy: Maruti
NEW DELHI, Mar 1 (Agencies):
Published on 2 Mar. 2010 12:44 AM IST
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Maruti Suzuki has said it had “no intention” to hush up the recall of the A-Star mini car in India, but refrained from going public on the issue as the country does not have a recall policy. The company also defended its decision not to inform stock market regulator Sebi on the matter immediately, as the amount required to be spent for the recall process would not have much impact on the company’s financials, and would not impact profitability, stated Economic Times. “There was no attempt to hush up the matter. There was a delay in going public as India does not have a recall policy in contrast to countries in Europe which have a framework in place for reporting such matters,” Maruti Suzuki chairman R C Bhargava told TOI. “In any case, we had written to all the customers of the car as well as the dealers, so it’s not fair to say that there was an attempt to suppress the issue.” He said the company had intimated authorities concerned in European nations as soon as it noticed problems in some cars around November. The Maruti chairman said the company had received fuel leakage complaint on three cars in Europe and one in India. “And this is out of the 70,000 units we sold in Europe and about 30,000 units in India. However, as a responsible company we decided to recall all the cars. We took special care to ensure the problem does not come across on any other car anywhere,” he said. Regarding informing Sebi, Bhargava said, “We are supposed to inform only if there is any significant amount involved. In this case, the upper limit for Maruti is around Rs 12 crore which is not large when we read it in relation to the company’s annual PBT amount of Rs 3000 crore. The amount is less than 0.4% of our PBT and would not make no difference to our price-to-earnings ratio.” Asked whether other models of the company could also be impacted by the faulty part, he said the fault was only on some units of the A-Star. “There is no problem on other models of the company.”

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