‘UTI is not in the business of bailing out any corporate’

Does the UTI come under pressure from political bosses to invest in a particular venture even if that venture may not be a good investment? ...

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Does the UTI come under pressure from political bosses to invest in a particular venture even if that venture may not be a good investment? If not, then who should be held accountable for bad investments?Subu
THERE is no pressure from any source regarding the trust’s investment decisions. Fund managers are empowered to take independent and informed decisions backed by quality research inputs.

If a prudent decision turns bad due to genuine post investment development, it is a part of the risk inherent in investment in mutual funds.

NEXT WEEK : SHATRUGHAN SINHA

Stars lend glitter to politics. But Bollywood hero and Union Minister for Health and Family Welfare Shatrughan Sinha has been drawing a lot of flak from his fellow Parliamentarians for taking time off from the House proceedings to attend film shoots. A recent UNICEF report on the poor condition of Indian children hasn’t helped matters either. However, ‘Shotgun’, as he is known in the film industry, has been lauded for his proactivity in spreading awareness about AIDS and polio. Address your questions to him at firingline@expressindia.com

Is the UTI bailing out errant defaulting corporates like IG Petrochemicals Limited and Mysore Petrochemicals Limited etc? How can it do so, especially after the Securitisation Act has been passed?Dilip Mulgaonkar
UTI is not in the business of bailing out any corporate firm. I will not comment on individual companies. As of now, UTI has initiated action against several defaulting corporates by giving consent to institutions to invoke the Securitisation Act for recovering the outstanding dues. This is because the UTI is not yet covered by the Securitisation Act. Apart from this, in many other cases the trust has filed suits in Debt Recovery Tribunals for recovery of its debt.

What are UTI’s plans to regain the lost confidence of its investors?Shailendra Kumar
UTI functions on the basis of empowerment, incentivisation, accountability and transparency. The performance of funds is also good in most categories. There is continuing focus on all matters which should favourably impact on investors’ interest. 75% of retail investors are with UTI. As for assured return schemes, there is the additional comfort of Government support.

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When is the UTI going to be privatised? Will the entire entity will be sold off or will a bunch of schemes be sold to successful bidders? Why then should we invest in UTI-II, we could very well choose an private sector mutual fund.K Vaithee Koya
EFFICIENCY and performance are functions of management and not of ownership. UTI’s schemes have in the recent past performed better than those of many other MFs, according to those who track the MF industry and publish their findings.

Looking at the portfolios of some of the schemes, it is clear that UTI has made many bad investments over the past few years. Have you put in checks and balances so that the mistakes are not repeated?Shibu Jose
There are major systemic improvements which have been put in place. Detailed investment guidelines, strengthening of internal audit and increased technology application are only a few examples of our effort. We are the first fund house to have a fully integrated front office automation system and a full fledged Risk Management Department.

For more questions, more responses, log on to the Sunday Express section of expressindia.com