All India UTI AMC Officers Association is a registered legal entity representing vast majority of Officers of UTI AMC Ltd as on date. The Registration Certificate of the Association is placed in this site for perusal.
Hon'ble Member of Parliament Shri Dilip Gandhi is the Patron and Chief of the Association and Shri Sanjay Kamble is the Advisor to the Association.
UNIT TRUST OF INDIA (UTI), one of India’s premier Public Financial Institutions was set up in 1964 by an act of Parliament i.e. Unit Trust of India Act, 1963. The primary objective for setting up of this institution was not profit making but to extend a vehicle to small investors to channelize their savings into capital markets. In the course of its existence, it has achieved great success in achieving this objective. Even at the stage of setting up, UTI was not directly owned by the Government of India but the initial capital of Rs. 5 crores was contributed by Reserve Bank of India (50%); State Bank of India and subsidiaries (15%); Life Insurance Corporation of India (15%) and Scheduled Banks and financial institutions (20%). This institution had the largest share of market amongst the mutual fund industry . It also had its dubious distinction amongst public sector enterprises of being the subject of hostile criticism by the press right from its inception.
During the period from 1964 to 2001, successive Finance Ministers have always relied on the Unit Trust of India to bail out of ticklish economic problems. During the period of ‘Emergency’, the then FM relied on UTI to try and woo back the sagging investment sentiments of the general public. Again, after the Harshad Mehta fiasco, when the Hon’ble Courts had restrained the transfer of ‘blocked’ shares, it was the US 64 of UTI which was called upon to deal with these shares. During various ‘payment crisis’ experienced at the Bombay Stock Exchange, Calcutta Stock Exchange, etc., it was always the UTI – especially the US64 – that came to the rescue of the exchanges. During the early stages of ‘disinvestment’ adopted by the Central Government, it was always UTI that was called upon to help in the process by bidding/ buying large part of the disinvested shares. UTI has, therefore, played a stellar role in building up the investment climate and mitigating the economic problems faced by the country on various occasions. Even today, the residual equity / debt holdings of the erstwhile UTI ( presently managed by SUUTI) ) is being used by Finance Ministers to meet shortfalls in the ‘planned expenditure’ side of the Union Budget.
UTI has to its credit the creation of some of the best financial products witnessed by the country.
In short, the UTI has been in the forefront of economic development of the country and building the confidence levels of the investing public at large.
Like all other institutions, UTI also went through the hard phase of its life cycle. During 2001, the UTI embarked on a mission to make all their schemes/plans SEBI compliant and wanted to align the US 64 scheme to daily NAV based trading. For this, it was proposed to keep the scheme closed for sales and redemptions for a period of 6 months. This lead to vociferous outcry from the public at large which mistook this move as closing down of US64. The media, as usual, trumpeted this development in unheard of proportions spreading panic amongst not only the investing public but also the Central Government of that time. This lead to the passage of UTI Repeal Act 2002 in the Hon’ble Parliament to repeal the earlier Unit Trust of India Act, 1963 and created two separate entities viz. SUUTI (Specified Undertaking of the Unit Trust of India) and the UTI Trustee Company Private Ltd (Specified Company) .
SUUTI ( a wholly owned undertaking of the Govt.) took over the assets and liabilities of US64 and other Assured Return Schemes of erstwhile UTI and even till date functions under the administrative control of Ministry of Finance under the newly formed Department of Public Investments.
UTI Trustee Company Ltd which the Specified Company under the UTI Repeal Act 2002 was incorporated as a a company under the Companies Act 1956 and subscribed in equal proportion by SBI , LIC , PNB and BOB . The NAV based schemes (Mutual Fund schemes) which were SEBI compliant vested with the UTI Trustee Company in the capacity as a Trustee to UTI Mutual Fund.
UTI Asset Management Company (UTI AMC Ltd) was formed and registered under the Companies Act 1956 and subscribed in equal proportion by the same set of subscribers ( SBI, LIC, PNB and BOB) as Investment Manager to UTI Mutual Fund. Notification no S.O. 40 (E) dated 15-01-2003 was issued to this effect. Govt. of India executed a transfer agreement on the same date with the four subscribers (SBI, LIC, PNB and BOB) transferring the Mutual Fund with assets and liabilities detaining terms and conditions to the transfer. Both these two entities came into existence w.e.f 01-02-2003.
Through the UTI Repeal Act 2002 read with Notification dated 15-01-2003 the officers and employees of erstwhile Unit Trust of India were transferred to UTI AMC Ltd , in line with Mutual Fund Industry practice with protection of their terms and conditions of service. Clause 6(1) in the UTI Repeal Act 2002 specifically provided for protection of the terms and conditions of service including salaries , pension, provident fund , medical facilities , etc. of employees and officers of Unit Trust of India. Similar protection was provided by insertion of specific clauses in the Transfer Agreement under clause 3.1 and clause 6.1 which were agreed upon by the four subscribers.
As a part of restructuring of UTI and with a view to reducing the liabilities of the new entity, UTI came out with a Voluntary Separation Scheme (VSS) for the employees at all levels. Close to 1300 of the nearly 2500 employees opted for the VSS thus reducing the staff liabilities by around 50%.
Till 2001, the salaries and service conditions, etc. of the employees and officers of UTI was aligned to those prevailing in the RBI and IDBI. As soon as wage settlements took place in RBI and IDBI, they would be introduced in UTI (through wage negotiations in case of workmen employees and through Administrative Circulars in case of Officers). There was also a practice of annual promotional exercise whereby all eligible employees and Officers were given equal opportunity to appear for written test / interviews for being promoted to the next higher grade.
This practice was followed flawlessly till 2005 when under the pretext of recruiting officers at ‘market linked pay’, the UTI AMC drastically changed the compensation structure and other service conditions of the Officers. Post 2005, there was high level of nepotism, favouritism and unnecessary recruitment of officers , esp. after a government funded Voluntary Separation Scheme during 2003, at exceptionally high salaries having scanty regard to experience/expertise or even the necessity of such officers.
A look at the expenses under “Salaries and Wages” as appearing in the Balance Sheet of UTI AMC, will corroborate this fact. While the unionised workmen employees were enjoying negotiated wage settlements (3 settlements all post 2003), there was no increase in basic pay / allowances for the officers for a decade till 2011. Again, post a settlement with the recognised workmen employee’s association, the Sodexho coupons given to them was raised to an amount much higher than that given to Officers. This lead to a spontaneous and instantaneous outburst from the officers – especially those who have been with UTI during its darkest period of 2001 to 2005. This outburst lead to an increase in the value of Sodexho coupons given to Officers to equal that given to the workmen staff.
Constrained by management actions, the Officers across India came together during January, 2011 to form the present All India UTI AMC Officers’’ Association. This was followed by a series of oppressive steps taken by the UTI AMC to thwart the collective approach adopted by the Officers. 7 office bearers of the Association were transferred from Mumbai to faraway places like Agartala, Jammu, etc. and on their refusal to report, they were placed under suspension. This lead to total unrest amongst the rank and file of UTI Officers all over the country and was followed by various forms of agitations. After protracted skirmishes, UTI AMC finally carried out a nominal increase in compensation (a meagre 3%). Retaliation to this was swift and immediate with all the Officers giving written representation to the UTI that they were totally unsatisfied with the raise offered and rejecting the offer.
In short, there has been blatant violation of the assurances afforded u/s 6 (1) of the UTI Repeal Act 2002. All the service conditions and wage structure of the Officers and other employees who opted to remain with UTI post the bifurcation have been modified or scrapped altogether. The long serving and loyal Officers and employees have been given a raw deal whereas the new recruited officers are given hefty compensation and higher position.
UTI AMC Management has been claiming that they are a Private entity and have even defied their coverage under RTI Act. However, wherever it suits them, they claim that they are a deemed PSU as their sponsors are SBI, LIC, BOB and PNB. There are pending cases before the Hon’ble Bombay High Court challenging the ‘private’ status and its coverage under RTI Act.
Some time during January 2010, about 26% stake in both UTI AMC Ltd and UTI Trustee Company Ltd were sold to a less known foreign institutional investor (FII) – M/s T Rowe Price at an undisclosed price and with some undisclosed understanding on management control over UTI AMC Ltd with 2 Board seats and with no representation of these four sponsors on the board of both UTI AMC Ltd and UTI Trustee Company Ltd.
UTI Trustee Company Private Ltd which is the specified company created u/s 2(h) of UTI Repeal Act 2002 can be held only by banks and financial institutions as defined u/s 2(c) and 2(e) of the act. Accordingly SBI, PNB, BOB and LIC which fall under the definition of banks and financial institutions became the subscribers in equal proportion (25% shareholding ) in the UTI Trustee Company, which is also a Public Financial Institution u/s 2(72) of new Companies Act 2013.
It is now understood that during January 2010 about 6.50% stake by each of these subscribers (26% totally) was sold to a Foreign Institutional Investor – M/s T Rowe Price at a meagre sum of just Rs 77,800/- by each of these subscribers. In effect 26% in the UTI Trustee company was sold for just Rs 3,11,200/- which has given control to the Foreign Institutional Investor , without invitation of public bids and as understood, even without the permission of the Ministry of Finance. Fact now remains that there has been a transfer of 26% stake in UTI Trustee Company , which is the specified company under the UTI Repeal Act 2002 and which can only be held by Banks and Financial Institutions.
The four sponsors who have agreed under the transfer agreement to cause protection of service conditions of the employees do not even have a board seat in both UTI AMC and UTI Trustee Company and hence these instrumentalities of the govt. cannot ensure protection extended under the UTI Repeal Act 2002.
Members of the Officers Association pledge to go all out and try to take UTI AMC back to the numero uno position in the Mutual Fund industry from the present 6th position to which it is now relegated on account of recent wrong practices.