T Rowe Withdraws Plea Against Domestic Investors From Bombay High Court
U.S.-based fund house T Rowe Price Group Inc., a foreign shareholder of UTI Asset Management Company, withdrew the writ petition it had filed before the Bombay High Court seeking its intervention in managing the company’s affairs and protecting its investment.
The money manager, in an emailed response to BloombergQuint, said it will not pursue the petition as it has been assured that the four domestic shareholders of UTI—State Bank of India, Bank of Baroda, Punjab National Bank and Life Insurance Corporation of India—will reduce their stakes to comply with the Securities and Exchange Board of India’s regulations. “We now have increasing confidence that they are taking steps to comply with Indian law and regulations regarding divestment of the PSU shareholders’ stakes in UTI and toward an eventual IPO of the firm,” T Rowe Price said.
The regulations being referred to are a cross-ownership rule passed by the SEBI in March 2017. It mandated the four Indian shareholders in UTI AMC that own 18.25 percent stake each, to reduce their individual stakes to below 10 percent by March 2019. T Rowe Price holds 26 percent in UTI AMC.
We believe these developments are in the best interests of UTI and its stakeholders, including its 11 million unit holders. We will continue to work with all parties to sustain progress and reach a successful resolution of these matters in the near term.A Statement By T Rowe Price Group Inc.
T Rowe Price, which manages assets worth over $1 trillion, had alleged that two Indian sponsors and their nominee directors on the board of UTI AMC Ltd. have taken control of the board and are “disrupting board governance”.
After having failed to get intervention from either the Ministry of Finance or markets regulator SEBI, T Rowe had approached the Bombay High Court to instruct authorities “to fulfill their supervisory responsibilities by directing the other UTI shareholders and their nominee directors to comply with regulations...,” it had said in an emailed statement to BloombergQuint in early August.
While the matter was listed before the Bombay High Court on Tuesday, the parties involved arrived at a consensus out of court. T Rowe had filed a case against the Union of India, Finance Ministry, SEBI, LIC, SBI, PNB, Bank of Baroda, UTI Asset Managment Company Ltd. and UTI Trustee Co. Pvt. Ltd.
T Rowe had also sought extension of the tenure of Leo Puri, former managing director of UTI AMC, who had stepped down in mid-August upon completion of his tenure. Puri had said he wouldn’t want a term extension if differences within the board.