Country's largest car-maker Maruti Suzuki today decided to seek approval of minority shareholders for its controversial Gujarat plant, which its parent Suzuki Motor Corp had decided to takeover from it.

The decision was taken at a board meeting held here, which lasted for over four hours and attended by parent Suzuki Motor Corp (SMC) Chairman Osamu Suzuki.

"We are not required by law to seek minority shareholders' approval but the board decided to do so as a measure of corporate governance," Maruti Suzuki India Ltd (MSIL) Chairman R C Bhargava told reporters here after the meeting.

He said 3/4th of the minority shareholders, who hold 44 per cent stake in the company, would have to approve the proposal through a special resolution.

The entire capex of the Gujarat subsidiary will be funded by depreciation and equity brought by parent SMC without "mark-up" as was earlier proposed, he added.

Also, in the event of termination of the contract manufacturing agreement, the facilities of the Gujarat subsidiary would be transferred to MSIL at book value, Bhargava said.

When contacted, a top official at one of the fund houses, which have been opposing the proposal, said the decisions taken by the board appear to be in the interest of the company and the investors.

"Today's decision to seek minority shareholders' approval is a welcome move. We will convey our official stand after studying the fine-prints and discussing the same among all 16 investors," the official added.

In January, Suzuki Motor Co announced that it would invest USD 488 million (about Rs 3,050 crore) to build a car factory in Gujarat by 2017, which was originally proposed to be set up by subsidiary MSIL.

Suzuki Motor Corporation (SMC) will invest in the plant through wholly-owned unit Suzuki Motor Gujarat (SMGPL).

The plant, which will be the first fully-owned factory of the Japanese giant, will have an initial capacity of 100,000 cars a year, all of which will be supplied to MSIL.

Maruti had originally proposed to set up the plant near Mehsana and had in 2012 bought land for the same but it has been taken over by Suzuki Motor to allow the Indian firm to focus more on product development and marketing.

Opposing the move, MSIL's institutional investors approached Sebi, seeking its intervention to safeguard minority shareholders' interests and to ensure compliance with good corporate governance norms with regard to the transfer of a Gujarat project to the car-maker's Japanese parent Suzuki.

The company is facing stiff resistance from private sector mutual funds and insurance companies, which own almost seven per cent of the company.

Separately, state-run Life Insurance Corporation of India (LIC) had also sought clarifications from MSIL about the Gujarat project. The private institutions are trying to rope in LIC to jointly oppose the company's decision.