Employees Provident Fund approves Reliance-Nippon stake deal

New Delhi - The Employees Provident Fund Organisation (EPFO) Tuesday gave its nod to the 26 percent stake sale by Reliance Capital Asset Management Company to Japan's Nippon Life insurance group.

"At today's (Tuesday) meeting, the proposal of Reliance Capital Asset Management has been approved," EPFO trustee and Hind Mazdoor Sabha (HMS) secretary A.D. Nagpal said.

The meeting was chaired by Labour Minister Mallikarjun Kharge.

According to Nagpal, the members were satisfied with the explanation given by Reliance Capital Asset Management that there will not be any change in the overall company policy or in the management.

"It is only a stake sale. We have not imposed any condition earlier that the company should not have any foreign equity holding. Further, the company had got permission from other authorities," Nagpal added.

The Reserve Bank of India (RBI), the Competition Commission of India (CCI) and the Pension Fund Regulatory and Development Authority (PFRDA) have already approved the proposed stake sale.

Last year, the EPFO appointed Reliance Capital Asset and others as its fund managers for three years.

As per the terms of appointment, the fund managers should not undertake measures like mergers, divestment and others without the approval of trust.

Early this year, Reliance Capital had announced that Nippon Life would take 26 percent stake in Reliance Asset Management for Rs.1,450 crore. The deal is the largest foreign direct investment in the Indian mutual fund sector.