State Bank of India (SBI) has decided to sell 8.51 per cent stake in UTI Trustee Company, which is the sponsor of UTI Asset Management Company.
In a statement to stock exchanges, SBI said the Central Board of Directors has approved the divestment of 8,510 equity shares constituting to 8.51 per cent in UTI Trustee Company to comply with SEBI regulation.
The other shareholders of UTI Trustee include LIC and Bank of Baroda. All the public sector companies together hold 18.24 per cent stake in UTI Trustee Company.
US-based investment management company T Rowe owns the highest stake of 26 per cent stake in the Trustee company and plans to raise it to 51 per cent by acquiring existing shareholders.
The shareholders of UTI Trustee Company gets right to appoint directors on the board and indirectly control UTI Asset Management Company.
Earlier, the market regulator had directed LIC, SBI and BoB to divest the stake in UTI Asset Management Company to below 10 per cent from 18.24 per cent and this was complied through the recent initial public offering.
This apart, the three public sector companies were told to divest stake in sponsor company UTI Trustee.
According to Sebi’s cross-holding norms for mutual funds, the sponsor of one AMC cannot hold more than 10 per cent in another.