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Parliament approves UTI's bifurcation

Parliament on tuesday gave its approval for bifurcation of Unit Trust of India into two companies -- UTI-I and UTI-II -- with Finance Minister Jaswant Singh assuring Rajya Sabha that government would meet all commitments to investors.

The Unit Trust of India (Transfer of Undertaking and Repeal) Bill 2002, already passed by the Lok Sabha, was approved by the Upper House by a voice vote after the mover of the statutory resolution opposing the Presidential Ordinance of October 29, Manmohan Singh (Cong), withdrew it and Left parties walked out in protest.

The minister said UTI-I would not be floating any new scheme and all existing commitments would be met by the government, while the UTI-II would be started as a Sebi regulated, asset managed and market competing scheme.

He assured the House that there would be no retrenchment of UTI employees. All of them would be put on the UTI-II attendance register with an option that they could take six months to decide if they wanted to take voluntary retirement.

Singh said the employees may also be considered for absorption in the newly set up UTI Bank in which the State Bank and the Punjab National Bank would have investments.

While informing the House that the process has already been started to punish the guilty responsible for mismanaging UTI affairs, the Minister said the matter has already been referred to the Central Bureau of Investigation and "nobody will be spared if found guilty".

Referring to an allegation by members that somebody in the Prime Minister's Office had been involved in the UTI scam, Jaswant Singh said if "any person was involved, it would have been found so far during CBI investigations".

He assured the House that findings of the Joint Parliamentary Committee, which is looking into the UTI affairs also, would be considered by the government and its recommendations implemented, if necessary.

The Minister said UTI was the first government sponsored mutual fund in the country with social content and government commitment. However, over the years, as many as 33 mutual funds have been started in India.

He said the government was neither distancing itself from governance of UTI, as alleged by some members, nor abdicating its responsibility.

However, the government was bifurcating UTI into two. While it would remain committed to part I for UTI's social content, it would be allowing the second part of UTI to act as a mutual fund in competition with private players under Sebi regulation.

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