StanChart may seek RBI nod first for MF bidders

Written by Sourav Majumdar | Davos, Jan 25 | Updated: Jan 26 2008, 05:27am hrs
Standard Chartered Bank, whose proposed deal to sell its mutual fund business to UBS fizzled out late last year, has decided to quickly revive the process, and is in talks with at least two leading Indian groups for the purpose.

Chastened by the experience of the earlier deal not passing muster with Reserve Bank of India (RBI), StanChart is now mulling the possibility of getting the names of possible bidders cleared by the regulator beforehand.

The names being cited as possible new bidders for StanChart Mutual Fund are the Reliance Anil Dhirubhai Ambani Group (R-ADAG) and the Ranbaxy group, both of which have major interests in financial services, though no official confirmation of this is available. StanChart is also in talks with several leading international names to sell the funds business in India.

Confirming that the move to sell the MF business had been revived and that talks with possible bidders were on, a top StanChart executive told FE in Davos that the bank was determined to move ahead quickly and sell the business. We want to do this deal asap, and do it smoothly. For that, we may even get the names of the bidders cleared by RBI in advance. It would be better that way, the executive said.

The $120-million deal between StanChart and UBS was touted as one of the biggest and most important mutual fund deals in India in recent times. However, the bank suffered a setback when it failed to secure regulatory approvals in time, following which the deal with UBS expired.

Sources said StanChart is still unclear exactly why the deal was not approved. But this time, it is treading cautiously and does not want to stumble at the last post. Hence, the idea of seeking prior RBI clearance.

A senior StanChart executive also said the price would not be as important as finding the right buyer and completing the deal without hitches. If we find that one of the Indian buyers is the best fit, the price will not be the most important factor. For the others, we will drive the usual bargain, the executive said.