New Delhi: Retirement fund body EPFO's trustees at their meeting on Tuesday will take up for consideration and approval the proposal of Reliance Capital Asset Management Limited (RCAML) to sell 26 percent stake to Japanese insurance firm Nippon Life.
This will be the second time that the Central Board of Trustees (CBT), the apex decision making body of the EPFO, will take up the proposal of its fund manager RCAML as it was deferred in the earlier meeting at Chennai in May.
The approval is needed because as per contract with the Employees' Provident Fund Organisation (EPFO), its fund managers "shall not undertake any corporate action including mergers, amalgamations, take over, acquisition, divestment etc, without the prior written approval of the Trust".
The agenda listed for the CBT meeting states that Reliance Capital Asset Management Ltd has sought EPFO's approval for the stake sale to the Japanese firm.
As per the note by RCAML, Nippon Life would be entitled to appoint a member on the board of the company following the stake sale.
The EPFO had in July last year appointed RCAML, State Bank of India, HSBC Asset Management (India) Private Ltd and ICICI Securities Primary Dealership Ltd as its fund managers for three years to manage its huge corpus of over Rs 3.5 lakh crore.
"We have to do a lot of due diligence before approving this stake sale by the Reliance Capital Asset Management Company. We will seek some clarifications on the issue before we finally go ahead to nod for the deal," a CBT member and Secretary Hind Mazoor Sabha A D Nagpal said.
Earlier, another EPFO trustee and Secretary Bharatiya Mazdoor Sangh B N Rai had opposed the company's decision saying it will go against the interest of the workers.
Competition watchdog CCI had recently approved the deal, which was valued at an aggregate amount of about Rs 1,450 crore and is the largest Foreign Direct Investment (FDI) deal in any Indian asset management company till date.