The UTI Asset Management Company could get the go-ahead to launch its long-pending initial public offering by early next year, as part of its attempts to bridge differences between the dissenting shareholders.

Sources close to the development said discussions are on to ensure that the UTI AMC launches its IPO by early next year or before March 2019. The proposal has been pending with the Finance Ministry and has been one of the key issues raised by T Rowe Price.

The domestic shareholders may also be impressed upon to lower their holding to less than 10 per cent in line with SEBI regulations by March next year. Requests by domestic shareholders to T Rowe Price for reducing its stake has not found much favour.

“But since the matter is sub judice , a final decision will be taken by the court,” said a person familiar with the development, adding that all parties are waiting for the matter to be heard by the Bombay High Court.

The Finance Ministry is keen to end disagreements between the shareholders and ensure smooth operations at the fund house and is understood to be engaging with the shareholders.

Bad signal to investors

“The government has been closely monitoring the situation and feels that such developments send a bad signal to investors,” said the source, pointing out that it took nearly two years to appoint Leo Puri as the head of the fund house after the previous chief UK Sinha moved to SEBI in 2011.

The Bombay High Court on Monday had adjourned till August 28 a petition filed by T Rowe Price seeking directions to the board of UTI and its four largest shareholders to bring down their individual stakes below 10 per cent through an IPO, as well as an extension to Puri.

The four domestic and state-owned shareholders of the UTI AMC — Bank of Baroda, Life Insurance Corporation of India, Punjab National Bank and State Bank of India — hold 74 per cent stake in the fund house while US-based T Rowe Price holds the remaining 24 per cent stake.

The domestic shareholders have been opposed to an extension for Puri, while T Rowe Price has been batting for him. Last week, the US-based firm approached the Bombay High Court on the issue.

On Tuesday, the board of UTI AMC announced the appointment of its senior most official — Group President and Chief Financial Officer Imtaiyazur Rahman, as acting CEO.

“Rahman will look after the day-to-day operations of the company, working closely with the rest of the senior leadership team,” UTI AMC said in a release.

The announcement comes a day after Puri left as the MD and CEO as his five-year contract came to an end amidst differences over an extension for his term between foreign and domestic shareholders.

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