SEBI Chairman U K Sinha has reportedly urged fund houses to play a more active role in exercising their voting rights in the interest of minority shareholders. He was addressing fund officials at the recently held AMFI board meeting, said three CEOs who had attended this meeting.
Sinha is said to have applauded active participation of fund houses in the recent merger of HDFC-Max Life insurance in which AMCs had opposed the proposal to pay Rs. 850 crore non-compete fee to Max Group promoters as part of the deal. Also, a few months back, top fund houses opposed the Suzuki proposal to set up a car plant in Gujarat.
Fund officials say that MFs are beginning to play an active role in having a say in company proposals. In fact, an analysis done by Value Research (VR) shows that most fund houses have voted in the proposals of their investee companies in FY15-16.
In 2014, the regulator had asked AMCs to disclose the rationale behind their voting pattern on their websites.
Typically, analysts and fund managers recommend their voting decision to their top management for approval. AMCs can also appoint a third party to vote on its behalf, which entails costs.
