Rediff Logo
Money
Line
Channels: Astrology | Broadband | Contests | E-cards | Money | Movies | Romance | Search | Women
Partner Channels: Auctions | Health | Home & Decor | IT Education | Jobs | Matrimonial | Travel
Line
Home > Money > Business Headlines > Report
December 24, 2001
Feedback  
  Money Matters

 -  'Investment
 -  Business Headlines
 -  Corporate Headlines
 -  Business Special
 -  Columns
 -  IPO Center
 -  Message Boards
 -  Mutual Funds
 -  Personal Finance
 -  Stocks
 -  Tutorials
 -  Search rediff

    
      



  Call India
   Holiday Special
   Direct Service

 • Save upto 60% over
    AT&T, MCI
 • Rates 29.9¢/min
   Select Cities



   Prepaid Cards

 • Mumbai 19.9¢/min
 • Chennai 26¢/min
 • Other Cities



 India Abroad
Weekly Newspaper

  In-depth news

  Community Focus

  16 Page Magazine
For 4 free issues
Click here!

 
 Search the Internet
         Tips
 Sites: Finance, Investment
E-Mail this report to a friend
Print this page Best Printed on  HP Laserjets

UTI holds over 50% in two companies

George Smith Alexander

Other than managing mutual funds and a bank, the Unit Trust of India holds more than a 50 per cent stake in two companies -- Palace Heights Hotels and JK Pharmachem.

The SS Tarapore Committee, which inquired into the activities of the Trust, has said that a majority holding by UTI in a company has serious ramifications for the public sector mutual fund, as it could impact UTI's own balance sheet.

"Ex-definition this (holding of over 50 per cent stake) would tantamount to these companies becoming subsidiaries of UTI which may have implications for the UTI's own balance sheet and disclosures; this is a matter which needs further examination," the committee observed.

UTI holds a 56.95 per cent in Palace Heights Hotel and a 54.83 per cent in JK Pharmachem.

In June 2001, UTI held more than 15 per cent stake in a number of companies. Its take was in the region of 20-30 per cent in as many as 22 companies, and even exceeded 30 per cent in seven companies.

UTI's investment in Palace Heights Hotels was identified by the committee as "investments in thinly traded companies" as on July 31, 2001.

The market/book value as on that date stood at Rs 100,000, whereas UTI had made investments to the extent of Rs 132.9 million in the company's equity.

Palace Heights Hotel also figures in the list of companies for which a full audit report needs to be prepared.

The committee has also said that UTI had inflated its income for the year ended June 30, 2000 by Rs 4.41 billion. The UTI board of trustees had in response to the statutory audit report for the year ended June 30, 1999, specifically undertaken not to write back interest and investment provision consequent to restructuring. The committee had observed: "It appears odd for the UTI to have resorted to the same practice in the very next year against the specific advice of the statutory auditors and the Board of Trustees' own resolution."

The statutory auditors' report for the period ended June 30, 2000 had said that the level of NPAs has come down to 7.57 per cent from 16.21 per cent in the previous year.

This was mainly due to substantial write back of interest (Rs 3.03 billion only in cases of steel industries) and investment provisions (Rs 1.38 billion only in cases of steel industries consequent upon restructuring carried out during the period under review and not due to actual receipt of either interest or instalment of principal), the statutory auditors reported.

Powered by

YOU MAY ALSO WANT TO READ:
The UTI Crisis
The Rediff-Business Standard Special
The Budget 2001-2002 Special
Money
Business News

Tell us what you think of this report

ADVERTISEMENT