Offload Equity In Assured Return Schemes: Malegam Committee

The Y H Malegam-committee has recommended that Unit Trust of India completely dispose of the equity investments in assured return schemes. The equity content in the portfolio of 25 such schemes with a total unit capital of Rs 27,240 crore as on June 30, 2001, is in the range of 15-20 per cent.

As per the information provided by UTI to the joint parliamentary committee probing the stock market scam, the cost of acquisition of the equity portfolio of about 45 income schemes stood at Rs 11,969 crore. The market value, as on May 31, 2001 had, however, dipped over 28 per cent to Rs 8,520 crore.

The committee, which has submitted its report, has said that UTI should recast the portfolio of these schemes as soon as possible. It should ensure that the portfolio of all these assured income schemes consist of only government securities and debt instruments.

Of the 25 assured return schemes, 16 with unit capital of Rs 17,814 crore mature within the next three years. Five schemes which offer returns on a one-year basis have unit capital of Rs 4,667 crore and mature between March 2005 and February 2006. There are four long-dated schemes with unit capital of Rs 4,939 crore which mature between September 2014 and June 2020.

The committee has said that regarding schemes where only one year