On Thursday, September 21, Mahindra & Mahindra, the leading Indian automobile company, announced that its Canada-based associate firm Resson Aerospace Corporation has ceased to exist.
The development comes at a time when the diplomatic relations between India and Canada are going through a tough phase owing the Canadian Prime Minister Justin Trudeau’s bizarre allegations against the Indian government.
In a stock market notification issued on Thursday, Mahindra & Mahindra informed that Resson Aerospace Corporation had filed for a voluntary winding up. Mahindra & Mahindra added that it holds an 11.18% stake in the Canada-based company through Class C preferred shares.
“Resson has received a Certificate of Dissolution from Corporations Canada dated September 20, 2023, which was informed to the company,” M&M stated.
M&M ने कनाडा की सब्सिडरी "Resson" बंद की #mahindra #Canada #mahindraandmahindra #BharatExpressBazaar pic.twitter.com/Phj5YtYmVd
— Bharat Express Bazaar (@BE_Bazaar) September 21, 2023
The statement added that Resson has ceased to exist and has also ceased to be an affiliate of the company as of September 20, 2023. M&M further stated that upon the liquidation of Resson, the firm is entitled to roughly 4.7 million Canadian dollars (which is approximately Rs 28.7 crore) as a distribution of proceeds towards the company’s Class C Preferred Shares.
However, the shutdown of Reson Aerospace will have little impact on Mahindra & Mahindra. People are looking at this development from an alternative perspective, given the present diplomatic spat between India and Canada.
Mahindra had signed a share subscription agreement in 2018 to acquire up to 10% share capital of Canada’s IT firm Resson Aerospace Corporation for up to Canadian dollars 6.63 million paid in cash.
It is worth noting that trade between India and Canada was worth approximately $8 billion US dollars in fiscal year 2022-23. The two countries’ imports and exports are about equal. Canada is India’s tenth major trading partner, whereas India is Canada’s seventeenth-largest trade partner.
Mahindra and Mahindra share had come down after the announcement yesterday, but it bounced back and has gone up today.
Diplomatic spat between India and Canada
India-Canada relations have been at an all-time low for some time now, owing largely to India’s wrath at Ottawa turning a blind eye to Khalistani extremism on its soil. With such a reckless remark by Canada’s Prime Minister, bilateral ties between the two countries are bound to deteriorate further.
On September 18th, Canadian Prime Minister Justin Trudeau accused India of killing Khalistani terrorist Hardeep Singh Nijjar on Canadian soil and expelled a top Indian diplomat. Trudeau said, without offering any evidence, that Canada is looking into ‘credible information’ about Indian agents being involved in Nijjar’s death. The Canadian PM’s outrageous and shocking allegations were strongly refuted by India.
In response to Canada’s hostile behaviour towards India and open support to anti-India terrorists, India summoned Canadian envoy Cameron MacKay and informed him of the government’s decision to expel a senior Canadian diplomat. Additionally, India has suspended visa services for Canadian nationals as well as called Canada a “safe haven for terrorists, extremists and organised crime.”
