Recast Plan To Dominate Uti Meet

One of the prime reasons for which the issue assumes importance is the fact that there is need for a sponsor for the mutual fund and the entity is expected to emerge as a result of the restructuring exercise.

Another issue which will be discussed at the board meeting is the consideration of the annual accounts for the year 1995-96.

The sponsor entity would not have predominance from any quarter. The sponsor apart from setting up the asset management company (AMC) would also appoint the trustees.

Jagdish Capoor, chairman of UTI had mentioned earlier that the board was considering two options before them. One would be to set up a holding company of various financial institutions and banks which would then set up the asset management company. The holding company would also hold stakes in the other UTI subsidiaries, UTI bank, UTI Securities Exchange, and UTI Investor Services Ltd.

 

The institutions, according to the second option, would be to have to set up the asset management company, directly with the institutions as sponsors, and the AMC itself holding stakes in the other subsidiaries.

The second option, Capoor said was felt by most members of the board as a more compact route. Within this scenario, the board will have the freedom to improvise on each of the options, if required and it will not be a water-tight situation, Capoor told Business Standard.

He said that a time-bound programme would not be possible, with the issue being subject to legislative changes and hence not in the hands of UTI, and more in the hands of the finance ministry.

Meanwhile, the institution has also started the reorganisation of its top level asset management team with M M Kapur handling US -64, UTI's largest scheme. He was earlier heading the UTI Institute of Capital Markets at Vashi.