Former President Ram Nath Kovind does not hold any stake in the State Bank of India - FACTLY
Sai Krishna Muthyanolla
July 27, 2022
A post is being shared on social media claiming that former President Ram Nath Kovind holds the highest stakes in the country’s largest bank State Bank of India (SBI). This post claims that Ram Nath Kovind owns 57.63% stake in SBI making him the largest stakeholder. Let’s verify the claim made in the post.
Claim: Former President Ram Nath Kovind holds a 57.63% stake in the State Bank of India.
Fact: SBI is a Public Sector Banking and Finance company in which the majority stakes are held by the Government of India. As the shares in a government company cannot be registered in the name of a public office which is not a corporation sole as understood in law, the acquisition or holding of shares in government companies will be held in the name of the President of India or Governor of a State. The Government of India’s present stake in SBI is 56.92%. Ram Nath Kovind does not own this government’s stake in SBI. Hence, the claim made in the post is MISLEADING.
On searching for the details of SBI stakeholders and their percentage of total shares in SBI, we found the complete details in the State Bank of India’s Annual Report for the year 2021-22. According to the information provided in the SBI’s 2021-22 annual report, 56.92% of total shares in SBI were held in the name of the President of India. Apart from the President of India’s stake, Non-residents (FIIs/OCBs/NRIs/GDRs) hold 11.31%, Mutual Funds & UTIs hold 13.32%, Private Corporation Bodies hold 0.79%, Banks/FIs/Insurance corporations and others hold the remaining shares. The President of India was named as the top shareholder in SBI with 56.92% of the total equity share.
As per the Department of Public Enterprise’s Company Affairs Memorandum No.15/32/65-IGC, the Government of India holds the shares in all government companies in the name of the President of India or the Governor of a State. As the shares in a government company cannot be registered in the name of a public office which is not a corporation sole as understood in law, the acquisition or holding of shares in government companies will be held in the name of the President of India or Governor of a State. The President or the Governor of a State functioning under the Constitution is not a corporate sole, just as the Administrator-General constituted under the Administrators General Act, 1963.
The memorandum states, “The acquisition or holding of shares in a company by the Government of India or a State Government is “executive action” as contemplated by Articles 77(1) and 166(1) of the Constitution and can, therefore, be made in the name of the President of India or the Governor of the State”. In view of the above, shares in a government company can be held in the name of the President of India or the Governor of a State. Neither former President Ram Nath Kovind nor the present President Droupadi Murmu personally own government’s 56.92% share in SBI. The stake is owned in the capacity of President of India.
To sum it up, former President Ram Nath Kovind personally does not hold any stakes in the State Bank of India.