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UTI chairman to keep off investment decisions

The chairman of the Unit Trust of India would no longer be involved in its future investment decisions and instead a three-member committee of executive directors would be put in place for the job.

Disclosing this in Calcutta on Monday, UTI chairman M Damodaran said the new Investment Committee was already in place of which currently he is a member.

But this was an 'interim arrangement' because there was insufficient number of EDs at the moment.

"As soon as we have one more ED, the chairman will no longer be its member and it will have only three executive directors", Damodaran told reporters.

This Investment Committee would be responsible for all investments made by UTI, Damodaran said.

The move by the country's largest mutual fund not to involve its chairman in future investment decisions comes a little over a month after former chairman P S Subramaniam was arrested by CBI for his alleged role in investing over Rs 320 million in Cyberspace Infosys.

Damodaran, who took over as the UTI chairman on July 15, however, said the current decision had nothing to do with the controversy over investment in Cyberspace, but because, "we want that investment decisions should be handled by professional fund managers and the chairman should concentrate on overall running of the organisation".

Damodaran, entrusted with the task of pulling UTI out of the current crisis, said the newly created Investment Committee would function under a common responsibility principle as three members would take decisions jointly and there would be no casting vote.

Interestingly, the UTI chairman also said investment in Cyberspace, which led to a major controversy, was not a loss-making decision.

The Trust, he said, actually made a profit of Rs 80 million from Cyberspace shares as "we had bought shares for Rs 930 and sold about 600,000 to 700,000 shares for Rs 1050".

Exuding confidence that UTI would be able to turnaround in a short span of time, Damodaran discounted rumours that the Trust was indulging in desperate selling of its holdings.

While confirming media reports that UTI had sold shares worth about Rs 2 billion to Life Insurance Corporation, the UTI chairman denied that the shares were sold at 10 per cent discount.

"We are in the process of making some changes in our portfolio. Since LIC wanted some of the portfolios in which we were no more interested, we sold. But this was done on the basis of market price", Damodaran said.

He also denied earlier reports that UTI had sought some relief package from the government, but said the government might decide to come to the help of UTI.

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