Prior to the AGM, LIC had written a letter asking for a board position since it holds a 20% stake in UTI AMC. UTI AMC had replied saying this was not possible since Sebi had decreed that the four PSU shareholders US firm T Rowe Price is the only non-PSU equity holder had their own mutual funds. Given that the four PSUs have not had a board position ever since T Rowe Price was brought into UTI AMC, it is not clear what has triggered this change in position. Nor is it clear why the issue was brought up in the AGM after UTI AMCs written reply.
Trouble between the government and UTI AMCs board started around March when a successor had to be found for UK Sinha, who took over as Sebi chief. At that time, UTIs board entrusted the task to an HR sub-committee. The HR sub-committee, in turn, asked HR firm Egon Zehnder to make a global shortlist; it was to interview candidates from this shortlist and send a final list for the board to consider. At this point, the finance ministry was reportedly keen on a candidate who was not on the Zehnder list. When the HR committee gave its final list to shareholders T Rowe Price, LIC, SBI, Punjab National Bank and Bank of India the PSU shareholders refused to accept the report.
Since then, officials of T Rowe Price have met finance ministry officials as well as individual shareholders to try and break the deadlock, but without success.