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SBI MF denies Emami equity invest was to protect co’s promoters

Cogencis, Monday, Jul 1

MUMBAI – SBI Mutual Fund Sunday denied it held any non-convertible debentures issued by promoters of the Emami group and said any suggestion that an equity investment decision was motivated by an intent to protect corporate debt investors sensationalises the issue.

Responding to a Cogencis opinion piece on Securities and Exchange Board of India, the fund house said that to even suggest it would act under duress from its sponsor State Bank of India in taking investment decisions was purely speculative.

Friday, the Cogencis opinion piece–welcoming SEBI's move to start an enquiry into the fund house's equity investments in Emami–suggested that the market regulator should ascertain if there was any pressure from its promoter bank.

The Cogencis piece was a follow-up to a report in The Times of India that quoted SEBI Chairman Ajay Tyagi as saying the regulator was looking into allegations that fresh equity investments by SBI MF in Emami was a type of a bailout for promoters of the company.

Denying it had any exposure to NCDs issued by Emami promoter entities, the fund house said it had an exposure of 2 bln rupees worth of commercial paper issued by the company, and not 1 bln rupees of paper as reported by Cogencis.

The exposures in the commercial papers will mature in November/ December, the fund house said in its response to the report.

The fund house also said the investment in equity shares of Emami was about 8.81% of the company's fully paid-up equity capital, and not 8.15% as reported by Cogencis.  End

Reported by Krishnadevan Vijayaraghavan 

Edited by Ranjana Chauhan

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