After unsuccessfully petitioning the finance ministry and the Securities and Exchange Board of India (Sebi), US investor T Rowe Price (TRP) on Wednesday filed a case in the Bombay High Court against the Indian government asking it to prevent PSU financial investors \u2014 State Bank of India, Life Insurance Corporation (LIC), Punjab National Bank (PNB) and Bank of Baroda \u2014 from scuttling Unit Trust of India\u2019s (UTI) attempts at an initial public offering (IPO) and trying to take over the country\u2019s fourth largest mutual fund through the back door. TRP owns 26% of UTI and was sold these shares in\u00a0 2009-10 by the government as part of a process to make UTI a board-managed professional company.\u00a0 With TRP accusing the four PSUs of trying to stall UTI\u2019s IPO \u201cfor reasons best known to them\u201d and to ensure it becomes headless soon \u2014 current MD Leo Puri\u2019s term ends soon \u2014 at stake are the interests of 11 million shareholders, lakhs of pensioners, Rs 3.6 lakh crore of UTI\u2019s corpus and India\u2019s reputation as a safe place for global investors. Others named in the petition are Sebi and the four PSU financial institutions \u2014 Sebi\u2019s job is to ensure the mutual fund guidelines were adhered to, so the suit asks the court to ensure Sebi does this.The battle between TRP and the government and the PSUs controlled by it began in April 2011 when TRP managed to fob off an attempt by the finance ministry to ensure its nominee was appointed the fund\u2019s CMD. While a truce of sorts was reached when Puri was appointed managing director after an independent search, uneasy relations prevailed since. The petition asks for implementation of Sebi\u2019s rules that the four PSUs lower their individual stakes in UTI to 10% each from 18.25% right now and to grant Puri a 12-month extension to see the IPO through. UTI\u2019s trustee board \u2014 which is responsible for the mutual fund under the law \u2014 asked for this at its June 18 meeting, but the asset management company (AMC) board did not comply with this. Interestingly, when a joint parliamentary committee was set up after the Unit 64 collapse \u2014 the current mutual fund was set up after this \u2014 it had warned of an \u201cinherent conflict of interest\u201d that the PSUs had since they ran their own mutual funds at that time. The petition quotes extensively from Sebi rules to show that the PSU investors are violating them. Regulation 21(2), it says, makes it clear the UTI AMC can be terminated by the majority of the trustees, but the AMC board continues to ignore the directions of the trustee board. Regulation 21(d), it adds, says the directors of the AMC have to be \u2018independent\u2019, but TRP claims the PSUs\u2019 nominee directors are not independent and function at the behest of the PSU companies. A TRP letter to Sebi and the finance ministry had detailed the pecuniary relationship of one of the LIC directors some months ago. Apart from Sebi rules, the petition quotes the Investment Management Agreement (IMA) between the trustee board and UTI AMC to provide asset management services to the trust. Clause 3.1(a) of the IMA says \u201cUTI AMC shall exercise these powers subject to the superintendence, control and direction of the Board of Directors\u201d of the trustees.