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China’s largest automaker SAIC Motor on Thursday signed a joint venture agreement with Sajjan Jindal’s JSW Group. Under this, the JSW Group will have a 35 percent stake in the operations of the Indian joint venture. However, the two companies did not say whether a new joint venture company would be formed or whether JSW would take a 35 per cent stake in SAIC Motor’s wholly-owned subsidiary MG Motor India. MG Motor is a British brand currently owned by Shanghai-headquartered SAIC Motor.
This year it was announced: Earlier this year, MG Motor India announced plans to offer a majority stake to Indian domestic partners over the next 2-4 years as part of a five-year business roadmap in the country. MG Motor India is also looking to raise capital. Its plan to bring more capital into the country from its Chinese parent company has not been successful amid heightened tensions between India and China following a border clash in Ladakh’s Galwan Valley in June 2020.
Government Strictness: In November last year, the company faced an inquiry by the Ministry of Corporate Affairs over irregularities and audit deficiencies in its financial records and was asked to explain why it had recorded an operating loss in 2019-2020. Apart from this, the Income Tax Department also searched the office of the company. The company was awaiting FDI approval from the Indian government for more than two years.