Three state-owned financial-sector entities – State Bank of India, Life Insurance Corporation of India and Bank of Baroda – on Friday moved the Supreme Court against the Securities Appellate Tribunal (SAT) order that partly upheld Sebi’s decision to penalise them for failing to reduce their stakes in UTI Asset Management Company (AMC).
Sebi had in August last year fined SBI, LIC and BoB of Rs 10 lakh each for failing to reduce their stakes to below 10% in UTI AMC within the stipulated timeline. All the three entities were required to bring down their stake in UTI AMC to 10% each by March 2019 from the existing 18.24%, as per the Sebi’s cross-holding norms for mutual funds. LIC, SBI and BoB were the sponsors of LIC MF, SBI MF and Baroda MF, but were also holding over 18% stake in both UTI MF and UTI Trustee Company.
Under Section 7B of the Sebi (Mutual Funds) (Amendment) Regulation, 2018, the market regulator mandated all mutual funds to comply with the norms by March 2019.
