RBI may not allow Stanchart in UTI's commodity arm
RBI may not allow Standard Chartered Mauritius Limited to pick up stake in STCI Commodities Limited, the commodity broking arm of UTI Securities Limited.
By PTI |
KOLKATA: Reserve Bank of India (RBI) may not allow Standard Chartered Mauritius Limited to pick up stake in STCI Commodities Limited, the commodity broking arm of UTI Securities Limited (Utisel).
Managing director of STCI P Sanyal said that while Utisel and Stanchart Mauritius had entered into an agreement on August 23 that the latter would buy 49 per cent stake in the former from STCI, RBI was yet to give its approval to deal.
"We hope to get the RBI approval within the next 10 days", Sanyal said here.
He said if RBI does not allow the foreign entity to have its proportionate stake in Utisel's wholly-owned subsidiary STCI Commodities, then the commodity broking arm would be hived off and brought under the fold of STCI.
"STCI will be keen to operate the commodity broking arm," Sanyal said.
Although RBI's approval was awaiting, the deal had been cleared by the Centre since it involved entry of foreign direct investment of Rs 147 crore.
Presently, Utisel is wholly owned by STCI.
If the deal went through, then Stanchart Mauritius would have the option to buy upto 75 per cent in Utisel in 2008.
Sanyal, however, said this was a part of the agreement which both the parties had entered. "But this would again depend on various regulatory approvals."
He said STCI would like to keep a residual stake in Utisel even if Stanchart Mauritius enjoyed majority stakeholding in the company.
On the restructuring of Utisel's board post Stanchart's entry, there would be four directors from the STCI side and three from Stanchart Mauritius.
He, however, said the managing director would be from Stanchart while STCI would appoint a non-executive chairman.
Sanyal said that the other crucial issue was that the UTI name would have to be dropped from January 2008 since it was owned by UTI MF.
Post January, the company could be renamed as STCI Stanchart Securities Limited.
"Nothing has been decided in that regard as of now," he said.
Managing director of STCI P Sanyal said that while Utisel and Stanchart Mauritius had entered into an agreement on August 23 that the latter would buy 49 per cent stake in the former from STCI, RBI was yet to give its approval to deal.
"We hope to get the RBI approval within the next 10 days", Sanyal said here.
He said if RBI does not allow the foreign entity to have its proportionate stake in Utisel's wholly-owned subsidiary STCI Commodities, then the commodity broking arm would be hived off and brought under the fold of STCI.
"STCI will be keen to operate the commodity broking arm," Sanyal said.
Although RBI's approval was awaiting, the deal had been cleared by the Centre since it involved entry of foreign direct investment of Rs 147 crore.
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Presently, Utisel is wholly owned by STCI.
If the deal went through, then Stanchart Mauritius would have the option to buy upto 75 per cent in Utisel in 2008.
Sanyal, however, said this was a part of the agreement which both the parties had entered. "But this would again depend on various regulatory approvals."
He said STCI would like to keep a residual stake in Utisel even if Stanchart Mauritius enjoyed majority stakeholding in the company.
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On the restructuring of Utisel's board post Stanchart's entry, there would be four directors from the STCI side and three from Stanchart Mauritius.
He, however, said the managing director would be from Stanchart while STCI would appoint a non-executive chairman.
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Sanyal said that the other crucial issue was that the UTI name would have to be dropped from January 2008 since it was owned by UTI MF.
Post January, the company could be renamed as STCI Stanchart Securities Limited.
"Nothing has been decided in that regard as of now," he said.
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