Business Today
Loading...

SEBI tells LIC, SBI, BoB to cut stake in UTI AMC below 10% or face strict action

SEBI says if these entities fail to comply with the directives, their shareholding and voting rights in UTI AMC and UTI Trustee Companies over 9.99 per cent and corporate benefits will stand frozen

twitter-logo BusinessToday.In   New Delhi     Last Updated: December 7, 2019  | 10:56 IST
SEBI tells LIC, SBI, BoB to cut stake in UTI AMC below 10% or face strict action
LIC, SBI and BoB have been asked to remove nominees from the boards of UTI AMC and UTI Trustee companies

Market regulator SEBI (Securities and Exchange Board of India) has ordered state-owned insurer Life Corporation of India, State Bank of India (SBI) and Bank of Baroda (BoB) to cut their stake in UTI Mutual Fund to below 10 per cent from the current 18.25 per cent by December 31, 2020. They have also been asked to remove nominees from the boards of UTI AMC (Asset Management Company) and UTI Trustee companies before December next year.

"It is noted that despite the expiry of over 20 months from the date of amendment of  the Regulations,  the Noticees (SBI, LIC and BoB) are  yet  to  achieve  compliance  with  these requirements," a Sebi order stated, adding that while  the  noticees  had initiated  some steps to  dilute  stakes, the substantial compliance with Regulation 7B remained pending.

SEBI also said if these entities would fail to comply with the directives, their shareholding and voting rights in UTI AMC and UTI Trustee Companies over 9.99 per cent and corporate benefits would stand frozen till they did so. They have been told to submit a compliance report within a month from such compliance.

SEBI said if they failed to follow the orders, it could initiate adjudication proceedings against the noticees.

Notably, SEBI rules do not permit any entity to hold more than 10 per cent stake in more than one fund house, and all three run fund houses with majority stakes. The market regulator had introduced cross-holding limits in mutual funds in 2018 to curb chances of conflict of interests.

Edited by Manoj Sharma

Also read: Sebi doubles PMS investment size to Rs 50 lakh, sets 31 days deadline for default disclosure

Sebi approves stricter disclosure norms for listed companies on loan defaults

SEBI bars Capital Heed proprietor from taking any fresh clients for investment advisory services

Youtube
  • Print

  • COMMENT
BT-Story-Page-B.gif
A    A   A
close