Mumbai, Dec. 17: Unit Trust of India (UTI) employees, anxious about the safety of their jobs, may finally be heard after all. With several political parties and even some NDA allies throwing their weight behind them, the government has decided to ensure that all employees are protected by the Trust’s new owners.
The government, sources said, is likely to insist on including a clause that protects the jobs of all employees of UTI in the memorandum of understanding (MoU) it will enter into with the mutual fund major’s four new sponsors. The inclusion of the clause will quell fears expressed by the staff and the officers’ unions of massive retrenchment once the mutual fund is privatised.
More importantly, with the government is finally veering around to the view of including the clause to protect UTI employees, any subsequent decision by the four sponsors to divest their stake even to a private entity would mean that the employees of UTI are suitably taken care of by the new promoters.
Sources said with the inclusion of the clause, foreign entities may find the mutual fund less attractive, which will indirectly ensure that its ownership remains in Indian hands.
Following its decision to restructure UTI, the government planned to set up an asset management company, UTI Asset Management Company, a trustee company, UTI Trustee Company, and a trust to which the NAV-based schemes of UTI will be transferred.
Bank of Baroda, State Bank of India, Punjab National Bank and Life Insurance Corporation will contribute to the share capital of the AMC and the trustee company, with each entity holding 25 per cent in the new outfit. The four sponsors will contribute Rs 2.5 crore to the paid-up capital of the AMC and subscribe Rs 25 lakh to the equity of the trustee company.
The protests against the government’s decision to privatise part of UTI came from the All India Unit Trust Staff Joint Action Committee—an umbrella organisation of the Unit Trust Employees Association and the Unit Trust Officers Association.