RestructuringSouth Korea’s Mirae Global Investments Company (MAGI Korea) wants to expand its financial services by setting up a separate operating cum holding company for all financial services business. In view of this, Mirae Asset Global Investments (India), called MAGI India which is acting as the asset management company (AMC) of Mirae Asset Mutual Fund, plans to transfer its AMC business and AIF (Alternative Investment Fund) management business to a wholly-owned subsidiary. This subsidiary is Mirae Asset Investment Managers (India).

“The proposed transaction is on account of internal restructuring of business of MAGI India, with no change in ultimate ownership and control of the Asset Management Company of Mirae Asset Mutual Fund, sponsor of Mirae Asset Mutual Fund and name of Mirae Asset Mutual Fund or any scheme of Mirae Asset Mutual Fund,” CEO Swarup Mohanty said in a message to partners.

Mirae Asset India started its journey in India with the establishment of asset management business with a seed capital of $50 million. It actively manages/advises on $5.3 billion AUM (assets under management) for clients. Mirae Asset Mutual Fund looks after domestic fund and advisory of offshore funds. Mirae Asset Capital Markets (India) Pvt. Ltd is another company it owns. There is also Alternate Investment Fund (AIF) – Real Estate with a $45 million dedicated fund. Plus, there is a venture capital advisory.

MAGI India is the current asset management company of Mirae Asset Mutual Fund. MAGI India is a wholly-owned subsidiary of Mirae Asset Global Investments Company Limited, a company incorporated in South Korea (referred to as MAGI Korea). MAGI Korea also acts as the sponsor of Mirae Asset Mutual Fund. Hence, MAGI Korea indirectly holds the entire share capital and controlling interest of Mirae AMC.

The Securities and Exchange Board of India (SEBI) vide its letter dated November 20, 2019 approved the proposed transaction with no objection to transfer the AMC Business by MAGI India to Mirae AMC.

The proposed transaction has also been approved by the Board of Directors of MAGI India, by the Board of Directors of Mirae AMC and the Board of Directors of Mirae Asset Trustee Company Private Limited (Mirae Trustee).

Post the transaction, Mirae AMC will become the Asset Management Company for Mirae Asset Mutual Fund; MAGI India will cease to act as the Asset Management Company for Mirae Asset Mutual Fund etc.

Also, all independent directors on the board of MAGI India will be appointed as independent directors of Mirae AMC, i.e. they will resign from MAGI India (on completion of the proposed transaction) and be appointed as independent directors on the board of Mirae AMC.

Mirae AMC, on account of being an indirect subsidiary of MAGI Korea, will be similarly placed as MAGI India and continue to be ultimately controlled by MAGI Korea.

As per Regulation 20(3) of the MF Regulations, any change in the appointment of the Asset Management Company (AMC) is subject to prior
approval of the unitholders. Accordingly, approval of the unitholders of all schemes of Mirae Asset Mutual Fund is being sought. The voting window will remain open from November 28, 2019 till December 28, 2019 (both days inclusive).

Since there are no changes in the fundamental attributes of any of schemes of Mirae Asset Mutual Fund, no exit option is required to be provided to the unitholders of the schemes of Mirae Asset Mutual Fund.

Author
Kumar Shankar Roy

Kumar Shankar Roy is contributing editor with RupeeIQ. Kumar is a financial journalist, with a functional experience of 15 years. He tracks mutual funds, insurance, pension, PMS, fixed income/debt and alternative investments markets closely. He has worked for The Times of India, The Hindu Business Line, Deccan Chronicle Group, DNA, and Value Research, among others, across different cities in India. He is deeply interested in marrying data insights with actionable opinion. He can be contacted at kumarsroy@rupeeiq.com.