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Bear freeze in larger interest, says Amfi

Unit-64 investors will have to bear with the Unit Trust of India's decision to suspend sales and repurchase for six months in larger interest to allow the trust to restructure the assets and provide net asset value-based prices, according to the Association of Mutual Fund of India president A P Kurien.

"The concern of small investors about absence of liquidity for six months are genuine but they have to bear the pain in larger interest," Kurien said here today.

The bearish market has eroded the value of assets managed by UTI for Unit-64, the largest scheme, he said adding, the financial institution has announced steps to restructure this scheme.

Asked whether this would set a precedent for other mutual funds, the Amfi chief said, "UTI's decision will not set a trend for other asset management companies as they are governed by the rules of the Securities and Exchange Board of India whereas Unit-64 is a special product guided by UTI Act."

Chairman of the Consumer Education and Research Centre Manubhai Shah said the decision is unfortunate and there would not be any liquidity for small investors.

Only option is to provide UTI time for restructuring the portfolio and link price to NAV, he said.

Meanwhile, the All India Association of Indian Industries president Vijay Kalantri said, "The suspension would severely erode investor confidence and the finance ministry must revoke this decision."

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