Govt, Fis To Pick Up Stake In Uti Holding Firm

This was decided by the UTI board at a meeting yesterday. The board chose the holding company concept out of the two alternatives shortlisted earlier. The suggestion is expected to be presented to the finance ministry for consideration soon, UTI sources said.

"On the question of ownership, as to how much stake the government, the instititions and the banks would hold is not yet decided. It is something which we are still working on," UTI chairman Jagdish Capoor said after the board meeting.

As to which of the institutions and banks would constitute the owner entities, Capoor said this would be decided only after the holding company concept of restructuring finds favour with the ministry.

 

The board had two alternatives for UTI's restructuring to choose from. The first was setting up a holding company by various financial institutions and banks, which would in turn set up the asset management company. The holding company would hold stakes in the other subsidiaries of UTI, UTI Bank, UTI Securities Exchange and UTI Investor Services.

The second option (which has now been rejected) was to have the institutions to directly set up the asset management which would in turn hold stakes in the other UTI subsidiaries.

The board also approved the annual accounts for the year

1994-95.

Among the major schemes of UTI are US-64 and Mastergain 92. While the reserves of the US-64 scheme have declined from Rs 6083 crore in the previous year to Rs 4006 crore in 1995-96, that of Mastergain 92 have gone up from Rs 415 crore to Rs 640 crore.

A notable aspect according to Capoor was that substantial work has been done on the reconciliation with custodians. "It is a creditworthy achievement compared to the earlier trends," he said.

UTI saources say: "In the past 14 years this is the first time that the auditors note has charitable words to say about the books. One thing that is unique this time is that the tone and tenor of the auditors has gone from negative to positive."

The auditors for the institution are S K Kapur & Co and newly-appointed Kalyaniwala and Mistry.