The Hindu : MIP investors' interests will be safeguarded

Online edition of India's National Newspaper
Friday, Apr 26, 2002

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MIP investors' interests will be safeguarded — Bajpai

NEW DELHI APRIL 25. The Securities and Exchange Board of India (SEBI) today said it would safeguard the interests of investors in UTI which apparently is under strain to redeem Monthly Income Plan of 1997 by April end.

After the SEBI's board meeting here today, Chairman, G. N. Bajpai, told reporters that "UTI was discussed. Our job is to take care of the investors' interest. We will take care of it". He declined to comment on the outcome of the meeting, saying "I don't want to give details as the discussion is privy to the members of the board. Whatever is necessary to communicate, we will do it at the appropriate time".

Indications are that the regulator would insist on UTI to make timely repayment to investors.

The SEBI might also permit UTI to float a new scheme to provide a switchover option to unitholders of the close-ended MIP scheme of 1997 that matures on April 30, as part of efforts to provide some relief to the fund.

The country's largest mutual fund has applied to SEBI for launching a new monthly income scheme exclusively for MIP-1997 investors. MIP-1997 unitholders can also opt for reinvestment option in any other UTI scheme open for sale.

UTI's MIP-1997 had a corpus of over Rs. 1,400 crores as on December 31, 2001 while its market value was about Rs. 980 crores. The scheme is likely to run a shortfall of over Rs. 400 crores.

UTI was in talks with LIC, SBI and IDBI for bringing in the additional funds. Even if it does not get the funds from the financial institutions, it can still draw up on the trust's Development Reserve Fund assistance. — PTI

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