InvestorQ : Why has SEBI imposed penalty on SBI, BOB and LIC?
Dhwani Mehta made post

Why has SEBI imposed penalty on SBI, BOB and LIC?

Answer
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Dilmini Mercia answered.
2 months ago


SEBI imposed a penalty of Rs.10 lakh each on LIC, SBI and BOB for not reducing their stake in UTI Mutual Fund below 10% within the stipulated time frame. This was supposed to have been adhered to under Regulation 7B of the SEBI MF Regulations.

It may be recollected that LIC, SBI and BOB are among the original sponsors of LIC MF, SBI MF and Baroda MF and they also hold over 18% in UTI MF. They were supposed to cut their stake to below 10% by March 2019 and hence were more than a year behind schedule.

However, the 3 financial giants have already informed SEBI that they would divest as part of the UTI MF IPO scheduled to open in Sep-20. Whether the three companies pay the penalty or approach the SAT on this issue remains to be seen.