By ZHOU Shuqi
SAIC Motor has been forced to issue a denial that shares in MG Motor India have been acquired at a low price by hostile Indian investors and SAIC has lost control of the company.
Insiders say SAIC is seeking Indian partners for a capital increase to improve MG’s position in the local market and there is little doubt that SAIC will retain control of MG India.
SAIC has a long-term development plan in India, which necessitates a stable business environment. It may well be seeking cooperation with local interests, but nothing has been said about equity transfer or capital increase and share expansion.
MG Motor India is China’s first venture into the Indian car market and investing in local manufacturing. In 2017, it acquired General Motors’ Halol factory for 3.3 billion yuan (US0 million). As of now, it has six models on sale in India, including EVs. Sales have been good, but heavily scrutinized, with allegations of financial irregularities.
Motor India’s operations are under investigation for tax evasion, and other violations.
In May, Reuters suggested that SAIC Motor planned to relinquish ownership of MG India, allowing majority ownership by local entities. Other foreign media indicated that MG Motor India’s plan of introducing funds from its parent company SAIC Motor is pending approval by the Indian government.
According to a local Indian press, Jindal Southwest, a local company, may acquire up to 48 percent of MG India and the future of the company remains uncertain in an unstable business environment.
