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July 17, 2001
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Money > Business Headlines > Report July 17, 2001 |
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Damodaran favours bringing UTI schemes under Sebi purviewThe newly-appointed Unit Trust of India chairman M Damodaran said on Monday that he would make sincere effort to bring majority of UTI schemes under Securities and Exchange Board of India regulations. He said this would bring transparency in its schemes, operations and revive investor confidence in the country's largest mutual fund. Talking to select media persons and investors forum in Bombay on Monday, the chairman said that the vital investment decisions of the UTI in the recent past would be looked into and if needed 'wrong decisions' would be rectified. Currently, UTI has 92 schemes with an investible fund of about Rs 751.59 billion as on June 30 and a majority of these schemes including US-64, are outside the purview of Sebi control. UTI was set up in 1964 by an Act of Parliament and enjoys a special status in the Indian financial market, but is not under the control of the market regulator. Damodaran, who chaired the crucial UTI board meeting on Sunday, said that the partial exit package for the US-64 unit holders was an excellent decision in the interest of small investors. He further said the graded pricing scheme as in US-64 rewarded investors for staying committed to the scheme. The UTI board's July 2 decision to freeze sales and repurchases of US-64 units for the rest of the year had drawn a lot of criticism. The scheme, which claimed to offer an ideal combination of safety, regular income and liquidity had failed to deliver what it promised the investors. The liquidity has been the most important consideration for Indian small investors. The finance minister had himself expressed his displeasure over the board's decision and asked the top management to review its decision and find out an immediate exit route for small investors in the scheme. According to mutual fund experts, the scheme should be brought under the purview of Sebi as other schemes to bring transparency in its portfolio investments and management. The holding pattern should also be in favour of fixed income securities, to meet the investors' expectations. ALSO READ:
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