New Delhi: The Securities Appellate Tribunal (SAT) has set aside a Sebi order to impose Rs 10 lakh fine each on three state-owned financial institutions -- SBI, Bank of Baroda and LIC -- in UTI AMC's stake dilution case.
Securities and Exchange Board of India (Sebi), in August 2020, levied the fine on three financial institutions for failing to reduce their stakes to below 10 per cent in UTI Asset Management Company (AMC) within the stipulated timeline.
The three companies were required to bring down their stake in UTI AMC to 10 per cent each by March 2019. They were holding an 18.24 per cent stake each in the fund house.
The entities were non-compliant with the Sebi mutual fund (MF) Regulations. Under the norm, no sponsor of a mutual fund is allowed to hold over 10 per cent of any other mutual fund or a trustee firm.
LIC, SBI and BoB are the sponsors of LIC MF, SBI MF and Baroda MF and at the same time, they were holding over 18 per cent stake in both UTI MF and UTI Trustee Company.
Following the Sebi's order, State Bank of India (SBI), Bank of Baroda (BoB) and Life Insurance Corporation of India (LIC) had moved the tribunal.
In an order passed on January 7, the SAT said it did not find any justifiable reason to impose any monetary penalty in the present matters, as every technical violation need not be visited with a monetary penalty. In these matters a warning is sufficient.
"All three appeals are partly allowed by substituting the monetary penalty of Rs 10 lakh each imposed on the appellants (SBI, BoB and LIC) with that of a warning," it added.