The carmaker has hired accounting firm KPMG to conduct a forensic audit, said these people.
The allegations under inquiry relate to executives purportedly providing benefits worth crores of rupees to some vendors and supply partners by sourcing parts from them at an inflated cost, according to people aware of the developments.
An emailed questionnaire sent to Maruti on Thursday remained unanswered.
A KPMG spokesperson said that the firm does not respond on ‘company-specific matters’.
The company is incorporating all legal procedures and conducting a third party independent forensic investigation to probe activity records of those under scrutiny for any wrongdoing, said a person aware of the ongoing inquiry. Employees concerned would be given due opportunity to present their case, he added.
“After a thorough investigation, the company will take strict action if required,” said a person aware of developments, who has observed the company for more than three decades. “The Japanese parent of the company is ruthless in dealing with anything related to irregularities in financials, as it is a serious corporate governance issue.”
ET has learnt that the company has taken possession of laptops and phones of the executives under investigation. None of the employees under scanner is a key management personnel, so the company is not required to make a disclosure to the stock exchanges.
“Any information or event that might have an impact on the share price is required to be disclosed by listed companies. Although there is no mandatory requirement to disclose internal investigations and their results, exchanges can seek information from the listed entity in the interest of investors,” said Ashish Kumar Singh, managing partner at Capstone Legal.
Maruti buys nearly 95% of its raw material by value from suppliers with manufacturing plants in India.
Raw material expenses of the company is three-fourths of its total revenue. In FY22, the company incurred cost material expense of ₹65,892 crore compared with ₹50,744 crore a year before.
It has 465 tier-1 suppliers and over 1,750 tier-2 vendors. Typically, 84% of suppliers have manufacturing units within 100 kilometres from the company’s plants.
Keyword: Maruti probing allegations of wrongdoing by some company executives