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US-64 revamp plan complete, 80 pc of corpus in 50 top shares

Unit Trust of India has completed the restructuring of its flagship Unit Scheme 64, shuffling 80 per cent of the corpus into 50 top performing scrips, UTI chairman P S Subramanyam said in New Delhi this evening.

The US-64 restructuring has been done as per recommendations of the Deepak Parekh committee which went into its functioning after the scheme ran into a negative balance leading to a public uproar.

''We have completed the US-64 restructuring under the SUS99 Scheme. We have started managing the 26 scrips of PSU companies against which bonds were issued to us,'' Subramanyam said. UTI is in touch with the government and is actively trading in these scrips. ''Government wants us to manage these scrips for them proactively in the market so that they (government) can make some money,'' he said.

As part of the revamp plan, out of 1,033 scrips under the US-64 portfolio, UTI has given bulk of the weightage to 50 top scrips. ''Eighty per cent of the portfolio is in these 50 shares,'' the UTI chief said.

Subramanyam said UTI was also ready for beginning the stock lending operations. ''We are getting ready with the infrastructure and as soon as it is ready we will start the stock lending operations,'' he said.

Subramanyam said UTI has formed an asset managment committee for managing US-64 and there is complete transparency around the scheme. He said the scheme is open to the scrutiny of the Securities and Exchange Board of India even though it might not technically fall under the SEBI purview.

''I have always said that we stand for transparency,'' he said. Asked about the US-64 exposure in property portfolio, the UTI chief replied, ''There were certain things which were done over the last 30 years and they are beyond my control. It will take us some time before things fall in place. SEBI is also aware of this.''

After a public uproar over the functioning of the US-64 when its reserves became negative, the government had appointed a high level committee under the chairmanship of HDFC Chairman Deepak Parekh in October 1998.

The committee had made 19 major recommendations of which nine have been implemented and others are at various stages of implementation. Although the committee had recommended a government investment of Rs 48 billion as a bailout plan for US-64, the size of the Special Unit Scheme-99 was restricted by UTI to Rs 33 billion with improvement in stock prices of some of the PSUs.

Recommendations already implemented include -- launch of growth sector fund, appointment of separate and independent fund managers, separate fund managers for US-64 backed by a research team, investment/disinvestmnent decisions based on research recommendations and increased spread between sale and purchase prices.

UNI

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