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Piaggio name to go off LML scooters

The Piaggio brand name is likely to go off the scooters being manufactured and marketed by LML Limited, following termination of the joint venture agreement by the Italian bi-wheeler major.

The scooters, which are currently being marketed under the LML-Piaggio brand name, would be sold with just the LML tag once the legal procedures of the JV termination are through, sources close to the two companies said.

''We are presently assessing the validity of the termination of the JV. But now that the partner had exited from the venture, its name would also be removed, though not with immediate effect,'' the sources said.

LML had recently rolled out its first non-Piaggio scooterette -- Trendy, a 60cc automatic transmission model carrying a price tag of Rs 17,500. This also marked the company's foray into the scooterette segment of the two-wheeler industry.

This is the second joint venture in the Indian two-wheeler industry to have reached this stage. Prior to this, Honda Motor Company of Japan had withdrawn from its joint venture with Arun Firodia-run Kinetic Engineering Limited. Honda had then struck off its name from the scooters being manufactured and marketed under the venture. However, the Japanese major still continues to give technical assistance to the project.

Piaggio had earlier alleged that it was ''forced'' to terminate the joint venture agreement regarding LML Limited ''because of the breach of trust by the Singhania family''.

Piaggio and the Singhania family both hold 23.6 per cent stake each in LML Limited while financial institutions control nine per cent and the rest is in the hands of the public.

Piaggio sources pointed out that the company is firm on exiting the joint venture and is now actively looking at the next possible option for India, which is likely to be in the form of a wholly-owned subsidiary to directly take on LML products.

The company had also alleged that the Indian directors on the board of LML Limited were indulging in gross mismanagement.

The allegations have been made in a petition filed by Piaggio in the Company Law Board under Sections 397, 398 and 402 of the Indian Company's Act, 1956. However, LML counsels had rejected the charges as ''frivolous and baseless''.

UNI

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