Source:: FC : May 28 2010 , Chennai
T T Srinivasaraghavan, managing director of Chennai-based Sundaram Finance Ltd said the company is neither in talks nor approached the regulator to exit its general insurance venture with UK’s RSA Insurance Group Plc. He also said the decision on mutual fund business would be taken in the next two months.
Media reports said Sundaram Finance is exiting its general insurance JV - Royal Sundaram Alliance Insurance Co. Ltd by selling its 74 per cent stake to its foreign partner RSA Insurance Group Plc, which would merge the entity with Reliance General Insurance Co. Ltd and take a 26 per cent stake in the merged entity.
“We have not approached the regulator for the sale and not in talks with anyone,” Srinivasaraghavan said while declaring the company’s fiscal 2010 results.
Meanwhile, the company expects to reach a decision on its mutual fund business with in the next two months.
Sundaram Finance has an asset management business tie up with BNP Paribas. But with BNP Paribas buying some of Fortis Bank’s international operations, including its asset management unit in India, BNP Paribas has to either exit one of the ventures or merge the two businesses.
The regulator bans companies from owning stakes simultaneously in two rival asset managers.
Sundaram BNP Paribas AMC manages assets worth $3 billion, while Fortis’s asset management company has assets worth $2 billion in India.
“The decision should be taken by our partners. We are in negotiations with them, but nothing has been decided and it would be too premature to comment on the outcome. A final decision would be taken in the next two months,” Srinivasaraghvan said.
He also added that whatever might be the outcome, Sundaram Finance is committed to its mutual fund
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