January 24, 2020
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"UTI Is Too Huge For Rapid Changes"

Newly appointed UTI chairman M. Damodaran admits he is in the hot seat. But he is quick to add that changes have already been set into motion in the beleaguered mutual fund. Excerpts from an exclusive interview:

Abhijit Bhatlekar
"UTI Is Too Huge For Rapid Changes"
Numerous committees have recommended various measures to restructure the uti. Why were most of these never implemented?
There will be a lot of changes now. We are trying to push a host of legislative changes in the forthcoming winter session of Parliament. Besides, we will also be looking at points raised both by the Malegam Commission and independent market analysts. All this should certainly happen within the next couple of months.

Should the uti be broken into smaller companies? The uti doesn't have an asset management company. Has that been a deterrent for its investments?
You will have to wait for some time because the uti is too huge an organisation for rapid changes to be implemented overnight. Yes, we hope to restructure many of our committees and set up a separate asset management company. The fact that we never had an asset management company has affected us pretty badly. It should have been done much earlier.

Should the uti Act be amended so that it becomes clear that it's another mutual fund under the purview of sebi?
The three-member Tarapore committee set up by the government is working towards that. Besides, the uti should have been under the sebi long ago. As per the current plan, uti will be under the purview of sebi by January.

Are you probing charges of insider trading—Indian companies indulging in heavy redemption after being aware of the US-64 freeze much in advance?
No. We are effecting a few changes in sensitive positions to bring in increased transparency to the organisation. All internal committees will be reshaped to have a significant outsider presence. We have also mounted a fierce recruitment drive for capable fund managers.

Will the finance ministry be involved in the day-to-day functioning of the uti now?
Two days ago, Jaimini Bhagwati, joint secretary (capital markets), was appointed as the finance ministry's nominated director to the uti board. It may not be possible for him to keep track of day-to-day operations, but he will definitely be in the know of all that is happening.
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