Samvardhana Motherson International Limited (SAMIL) has disclosed that its indirect wholly-owned subsidiary in Argentina faces a significant tax penalty. The subsidiary, Motherson SAS Automotive Modules and Services Argentina S.A. (MSAS Argentina), has been fined ARS 56,436,886.20 (approximately INR 3.67 crore) by Argentina's tax authority, Agencia de Recaudacion de Control Aduanero (ARCA).

Penalty Details

The penalty stems from improper VAT input claims and deductions made between 2019 and 2023 against non-compliant supplier invoices. Importantly, these violations occurred before Motherson's acquisition of the business, which was completed on July 31, 2023.

Key Points of the Disclosure

Company's Response

SAMIL states that there is no material impact on the financial or operational activities of MSAS Argentina or the parent company. The company plans to pursue indemnity provisions with the seller, subject to limitation periods.

Additional Corporate Development

In a separate development, SAMIL has announced that its subsidiary, Motherson Technology Services Limited (MTSL), has submitted an application to the National Company Law Tribunal (NCLT) Mumbai Bench. This application, filed on October 15, 2025, seeks approval for a reduction in MTSL's share capital under Section 66 of the Companies Act 2013.

SAMIL currently holds a 92.96% equity stake in MTSL. Upon completion of this share capital reduction scheme, MTSL and its subsidiaries are expected to become wholly-owned subsidiaries of SAMIL.

These developments highlight the ongoing corporate restructuring and regulatory challenges faced by Samvardhana Motherson International Limited as it navigates its global operations and subsidiaries.

Samvardhana Motherson International Limited (SAMIL) has taken a significant step towards consolidating its ownership of its technology subsidiary, Motherson Technology Services Limited (MTSL). The company has submitted an application to the National Company Law Tribunal (NCLT) Mumbai Bench for approval of a share capital reduction scheme in MTSL.

Key Details of the Application

• Application Date: October 15, 2025
• Regulatory Framework: Section 66 of the Companies Act 2013
• Current SAMIL Ownership in MTSL: 92.96% equity shareholding
• Post-Scheme Outcome: MTSL and its subsidiaries to become wholly-owned subsidiaries of SAMIL

Background and Implications

SAMIL had previously disclosed its intentions regarding this scheme on August 29, 2025. The move is part of a broader strategy to streamline the company's structure and potentially enhance operational efficiency.

Regulatory Compliance

The company has submitted this update in compliance with Regulation 30(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This ensures transparency and keeps shareholders and the market informed about significant corporate actions.

Potential Impact

While the immediate impact on SAMIL's stock price may be limited, this development could have several implications:

1. It signals SAMIL's commitment to consolidating its tech operations under its direct control.
2. Full ownership of MTSL could potentially lead to more streamlined decision-making and resource allocation within the group.
3. The successful completion of this scheme may impact the group's financial statements in future quarters.

Investors and market watchers will now await the NCLT's decision on the application, which could have implications for SAMIL's corporate structure and potentially its future financial performance.

Note: As with any corporate action, investors are advised to conduct their own research and consult with financial advisors before making investment decisions based on this development.