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UTI Asset Management is set to split its top post. Its shareholders have agreed to appoint a separate chairman and a managing director (MD) for the fund, said two sources in the know.
Yesterday, it was decided that Leo Puri, a senior advisor to McKinsey & Co, would be appointed MD of the country’s fifth largest mutual fund, while a senior finance sector professional would be brought in as chairman. However, it is unclear if Puri has accepted the offer, as he was initially slated to become UTI MF’s chairman and managing director (CMD).
An email to UTI on the decision did not elicit a response till the time of going to print.
Speculation is rife on whether Puri would take up the MD offer. UTI insiders said he could if the chairman’s position was a non-executive one. Shareholders are considering the former head of a public sector insurer to be the chairman, the two people familiar with the development said. UTI board will meet to decide on Puri’s appointment soon, said one.
“There is likely to be another meeting to ratify the same but that is more in the nature of a formality,” the person added.
The decision to split the top position is a deviation from the earlier plan to appoint a single person as CMD. Differences between shareholders and trustees over the profile of UTI’s head could have led to the bifurcation. State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation hold 18.5 per cent each in UTI, while US investment manager T Rowe Price owns 26 per cent.
T Rowe Price has been pushing for a professional to head UTI, which has been without a CMD for two years, since U K Sinha moved to the Securities and Exchange Board of India as the chairman. The US firm has been supporting Puri’s candidature for the top post at UTI, said sources.
Since Sinha became Sebi chairman, there have been multiple attempts at putting in place a new head. A proposal to put in place Jitesh Khosla, a senior bureaucrat, was nixed after opposition from T Rowe Price, which wanted a professional with experience in the financial services space. Khosla is brother of Omita Paul, an advisor to Pranab Mukherjee, who was then the finance minister. Puri had earlier failed to go through after public shareholders noted his qualifications did not match those mentioned in a advertisements inviting applicants for the post.
UTI'S SEARCH FOR LEADERSHIP: HOW IT PLAYED OUT
- February 2011: UK Sinha leaves UTI to become Sebi head
- Four-member committee of divisional heads formed to look after day-to-day affairs
- Government tries to appoint Jitesh Khosla through public sector shareholders
- T Rowe Price opposes move
- January 2012: Board appoints Imtaiyazur Rahman as Acting CEO
- June 2012: UTI seeks applications for the top post at the mutual fund
- Leo Puri selected to head the mutual fund
- Public sector shareholders oppose him, citing qualifications which don't match advertised requisites
- Sunil Mehta also reportedly in the running but appointment doesn't happen because of lack of consensus
- November 2012: Selection process starts afresh
- Leo Puri selected
- UTI decides to split post of CMD
