The trustees of UTI, the country’s fifth largest MF in assets, are proposing a split of the top post, resulting in the asset management company having a separate chairman and a managing director. The plan to bifurcate the post, a sudden shift from the original decision to appoint a single person as chairman and managing director (CMD), is said to have irked UTI Mutual’s shareholders, mainly US-based asset manager T Rowe Price.
The fund’s trustees are scheduled to meet this week to discuss the proposal. This comes as shareholders were set to approve the appointment of Leo Puri, senior advisor to McKinsey & Co, as the CMD of UTI MF. The trustees now intend to propose Puri’s name for chairman, while nominating an MF sector insider for the MD’s position. The trustees are Janki Ballabh, former chairman of State Bank of India; P G Apte, director of Indian Institute of Management, Bangalore; S P Oswal, CMD of Vardhman Textiles; Ashok K Kini, former managing director of SBI; S Ravi, a chartered accountant, and P V Ramana, chairman, ITM Business School
“The logic to split is to have a high-profile name as the chairman and an experienced MF professional as MD,” said a person in the know. An email query to UTI MF on this matter did not elicit a response till the time of going to print. As mentioned earlier, the plan has not gone down well with shareholders, mainly T Rowe Price, which holds 26 per cent in the company. Constant flip-flops in the selection process for a head have delayed the appointment of a CMD by a little over two years, since U K Sinha moved to head the Securities and Exchange Board of India. T Rowe Price, too, did not respond to an email query on this matter. The other shareholders of UTI are SBI, Punjab National Bank, Bank of Baroda and Life Insurance Corporation, which have 18.5 per cent each of the equity.
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The appointment process has had its share of controversies. Earlier, shareholders had rejected Puri’s candidature as he did not have the qualifications specified in the advertisement for the post. Later, the ad was revised and that allowed UTI to consider Puri for the top position again.
A proposal to appoint Jitesh Khosla, a bureaucrat, as the CMD met with opposition from T Rowe Price, as it felt he did not have the expertise to handle an MF. Khosla is the brother of Omita Paul, who was an advisor to the former finance minister Pranab Mukherjee.