T Rowe Price owns a 26 percent stake in UTI AMC and is the company's single largest shareholder
As per an order passed earlier this year, a shareholder will have to cut any stake of over 10 percent in all but one mutual fund company by March 2019. This would mean that the shareholder will also have to give up their seats on the board of the fund house accordingly.
The state-owned companies reckon the rule should apply to T Rowe Price as well, sources told the paper.
T Rowe Price owns a 26 percent stake in UTI AMC and is the company's single largest shareholder. It is currently in the middle of a feud with a clutch of state-owned companies over the continuation of Leo Puri as the fund house's CEO.
SBI, LIC, Punjab National Bank (PNB), and Bank of Baroda (BoB) each hold a 18.5 percent stake in the fund house. All of them reportedly feel Puri's performance does not warrant an extension of his term, something that the American investor is vehemently opposing.
Moneycontrol could not independently verify the news.
"We have made a representation to Sebi and DIPAM (Department of Investment and Public Asset Management) that the new rule shouldn’t make a distinction between domestic and foreign shareholders, so T Rowe Price, which holds a 26 per cent stake in UTI AMC, should also be directed to bring down its stake in the company," a source told The Economic Times.
T Rowe Price on Wednesday filed a petition with Bombay High Court, asking it to intervene in order to extend the tenure of Leo Puri.
The US-based investor also wanted the court to order Securities and Exchange Board of India (SEBI) and the Finance Ministry to direct domestic shareholders of UTI AMC to lower their stake in accordance with the norms.
T Rowe Price alleged that the four PSUs are attempting stall UTI AMC's initial public offering, in which it does not want any delay.
Imtaiyazur Rahman to take over as interim chief?
UTI AMC has chosen Chief Financial Officer Imtaiyazur Rahman to take charge as interim chief if Leo Puri's term is not extended, according to a report by Business Standard."We have no comment on the report about Mr. Rahman," a spokesperson for T Rowe Price told the paper.