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Wednesday, August 13, 2008

Now, UTI will also come under RTI purview

Publication: Times Of India Delhi; Date:2008 Aug 11; Section:Times Nation; Page Number 15 ; Viju B | TNN

Mumbai: This will bring cheers to lakhs of mutual fund investors who are worried about their investment parked with various pubic sector financial institutions in the country. In a landmark order, the Central Information Commission (CIC), ruled that Unit Trust of India Asset Management Company is a public authority and thus it has to comply with the provisions of section 4 of the Right to Information (RTI) Act.

UTIAMC is the investment manager for UTI mutual funds which in turn invest public money in stock markets and debt instruments. The CIC order on August 6, will now make it mandatory for UTIAMC to comply with section 4 for the RTI Act which states that public authorities need to maintain its records so that applicants can inspect or even ask for copies of the records.

The order comes after Dombivali resident Vijay T Gokhale approached CIC when UTI and SEBI replied to his RTI queries stating that UTI was not a public authority. ‘‘I approached the commission after UTIAMC replied that all its three entities, UTI mutual funds, UTI trustee company and UTI asset management company, do not fall under the ambit of the RTI Act,’’ Gokhale said.

When the case came up for hearing at CIC, UTI officials argued that it was not a public authority as it is incorporated under Companies Act and SEBI. ‘‘Even though the entire share capital of UTIAMC is held by four public sector banks, UTIAMC is a company registered under the Companies Act and is neither financed by the government nor controlled by it,’’ the UTI official said. The CIC then asked them to furnish copies of balance sheet, memorandum and articles, mode of appointment of directors, profit sharing pattern of the company and also reasons for retaining the UTI logo.

The CIC, in its order, said UTIAMC has been sponsored by public sector institutions and banks like SBI, PNB, LIC and Bank of Baroda. ‘‘In other words, UTIAMC is owned by four public authorities. An institution wholly owned by a public authority could be considered to be a public authority under the RTI Act,’’ the CIC order said.

‘‘From the purpose and object of the RTI Act, it is crystal clear that there should be transparency in the functioning of any institution in which public money is deployed,’’ the order said. The CIC, while passing the order directed UTIAMC to designate PIOs and appellate authorities to comply with the provisions the RTI Act in the next 30 days.

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