Damodaran May Head UTI MF

New Delhi, January 24: | Updated: Jan 25 2003, 05:30am hrs
Mr M Damodaran is likely to head the new market value-based UTI Mutual Fund, promoted by LIC and three leading banks, after the new fund becomes operational from February 1.

Mr Damodaran, who was the government appointed administrator for the Unit Trust of India, is slated to head both UTI-I comprising of US-64 and assured return schemes as well as UTI-II, said a top official in one of the sponsors here on Friday.

The government signed an MoU with the new sponsors Life Insurance Corporation, State Bank of India, Punjab National Bank and Bank of Baroda on January 15 to transfer 43 NAV-based schemes under UTI-II to the new UTI Mutual Fund on February 1.

The four leading financial players formed a separate asset management company (AMC) with an initial capital of Rs 10 crore and in the lines of Sebis 3-tier structure. Even after the split, UTI Mutual Fund will continue to be leading player with over Rs 15,000 crore worth of assets under management (AUM). The government will continue to run the Rs 31,000 crore worth UTI-I, comprising US-64 and assured return schemes and gradually wind it up after all the schemes matures.

The present UTI chairman M Damodaran will continue to be the administrator for the beleaguered UTI-I for one year. The government appointed four advisors Additional Secretary (Budget) D Swarup, Joint Secretary (capital markets) UK Sinha, AN Shanbag and NC Bhide, to assist Mr Damodaran. The new sponsors, it is learnt, has already shortlisted Mr Damodarans name for heading UTI-II as well. An official announcement would be made only in February 1, sources said.

The government had already issued four notifications on Friday for transfer of NAV-based assets to a new AMC, operationalisation of UTI-II from February 1, appointment of administrator and board of four advisor for UTI-I. Earlier, finance secretary S Narayan there was no bar for Mr Damodaran to head both UTI-I and UTI-II.

However, it was up to the new sponsors to choose the new CEO. The four sponsors had invested Rs 2.5 crore each in the AMC. A chartered accountant has been appointed to carry out due the existing employees of UTI would be shifted to UTI Mutual Fund but some employees would be borrowed from the company to take care of UTI-I.