maruti: Maruti is investigating allegations of wrongdoing by some executives

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Maruti Suzuki India is investigating allegations of wrongdoing by some executives in the company’s purchasing department, based on a complaint filed by a whistleblower, people with knowledge of the incident have said. evolution.

The automaker has hired accounting firm KPMG to conduct a forensic audit, these people said.

The allegations under investigation relate to executives supposed to provide benefits worth millions of rupees to certain suppliers and supply partners by sourcing parts from them at an inflated cost, according to people aware of developments.

A questionnaire emailed to Maruti on Thursday went unanswered.

A KPMG spokesperson said the company did not respond to “company-specific questions”.

The company is integrating all legal process and conducting an independent third-party forensic investigation to probe the activity records of those under scrutiny for any wrongdoing, a person with knowledge of the ongoing investigation said. Affected employees will be given the opportunity to present their case, he added.

“After a thorough investigation, the company will take strict action if necessary,” said a person familiar with the developments, who has been observing the company for more than three decades. “The company’s Japanese parent company is ruthless in the face of anything involving financial irregularities, as it is a serious corporate governance issue.” ET has learned that the company has taken possession of the laptops and phones of the executives under investigation. None of the employees under scanner is a key member of management, so the company is not required to report to stock exchanges.

“Any information or event that could have an impact on the share price must be disclosed by listed companies. Although there is no obligation to disclose internal investigations and their results, stock exchanges may request information to the listed entity for the benefit of investors,” said Ashish Kumar Singh, managing partner at Capstone Legal.

Maruti sources almost 95% of its raw material by value from suppliers with manufacturing facilities in India.

The company’s raw material expenditure accounts for three-quarters of its total turnover. In FY22, the company incurred material expenses of 65,892 crore compared to 50,744 crore a year earlier.

It has 465 Tier 1 suppliers and more than 1,750 Tier 2 suppliers. Typically, 84% of suppliers have manufacturing facilities within 100 kilometers of the company’s factories.

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