Companies & Sectors
UTI’s Fake 50 Year Celebration

UTI is celebrating its 50 years of existence, unashamed of two bail-outs with taxpayers' money

In February 2014, UTI Mutual Fund (UTIMF) launched its celebration of 50 years of operations without a trace of embarrassment or irony. Former finance minister P Chidambaram and SEBI chairman UK Sinha, who earlier headed UTIMF, flagged off the celebration.

A coffee table book of UTI’s history was released that day in the presence of almost all but two of its most controversial ex-chairmen in nearly four decades. One was the late MJ Pherwani (who grew UTI into a mammoth fixed-returns giving trust and development finance institution rolled in one, but set it up for a future fall) and the other was the late PS Subramanyam, who presided over its collapse, after it had already been seriously weakened.  Did the coffee table book document its ignominious fall and split? How did UTIMF justify its claim of 50 years of glorious existence?

A pliant media is silent about this hoax. Now UTIMF, which had remained headless for a long interregnum under the UPA, wants to continue the celebrations with the Bharatiya Janata Party (BJP) government in power. Media reports say the Fund has persuaded the government to issue a postage stamp to commemorate its 50 years of existence.

For those with short memories, here is a quick update. In July 2001, under ferocious public pressure, a BJP-led government, with Yashwant Sinha as finance minister, reacted with alarm to UTI’s decision to freeze the sale and purchase of its famous Unit-64 Scheme. The Scheme had been started in the year of UTI’s birth and finds no mention in its fake 50-year celebration.

Earlier, in 1999, UTI had survived another collapse with a Rs3,300-crore government bailout. It had a terrific opportunity to revive in the dotcom bubble, but chairman PS Subramanyam only ran it to the ground. In 2001, sharp criticism over continued dubious investments, collusion with brokers, betrayal of public trust and the setting up of yet another joint parliamentary committee to investigate the Ketan Parekh scam forced the government to split the investment behemoth into two.

One was UTI Special Undertaking (SUUTI) which acted as a holding company for certain unlisted investments and blocks of major listed investments and realty owned by UTI. The other was UTI Mutual Fund which is ‘celebrating’ 50 years of existence. Millions of Indians who invested in US-64 for higher returns and tax benefits will attest to the fact that there is no connection between the two entities. So how do the 50 years tot up?




2 years ago



2 years ago

​SCUP-senior citizen unit plan-a healh insurance was closed prematurely and unit holders (couple of lacs )were handed over NAV which was supposed to be utilised for senior citizens after age of 60.

All of the consumer organisations are SILENT on this (UTI's)premature withdrawal of Senior Citizen's Mediclaim plan due to complications involved in fixing responsibility.

UTI's has proved that its possible to fool everybody at ALL TIMES.​


2 years ago

SBI celebrated their 200th year, they counted from Bank of Calcutta / Imperial Bank days. Canara Hindu Permanent Fund became Canara Bank which celebrated their centenary counting from 1906. The same is true for many other institutions which celebrated their 100th or 50th year.
Should a person not celebrate his 50th year because he was sick at 40 ?
In UTI's case, I think, the Repeal Act (of UTI Act ) has conferred the right ,as a successor of old UTI , on the new UTI. And being a mutual fund, they will of course not spend from taxpayers money for their celebration , if any. Why do we grumble?

Dipakkumar J Shah

2 years ago

UTI and their Transfer agent made a fraud in many certificates !! No reply is given by UTI. Many units were sent for transfer and the same is encash by some body!!RT Agent is silent for last many years more than 10 years!!

jaideep shirali

2 years ago

UTI was used by the Govt earlier, to prop up the markets, or to invest in shady politically connected shares, so it was not surprising that US 64 lost money. But bailing US 64 out at the tax payers expense was unethical, to say the least. There were many mutual fund schemes from PSUs such as LIC, GIC and PSU banks which quoted below par, none of these were bailed out, so why US 64, an equity scheme that paid dividends like an FD? US 64 holdings were converted into low paying bonds, but SUUTI profited immensely, so US 64 holders lost out again. One of the PSU insurance companies gave their employees gold coins, rather than plough that money into operations. As for celebrations, everybody loves to celebrate using public money, but PSUs seem to forget that their very operations depend on the taxpayer, so they have no right to squander profits on celebrations.The irony of the celebration is that UTI had about Rs. 50,000 cr in AUM before private mutual funds were permitted, now the industry has an AUM over 16 times that amount.


2 years ago

SUUTI is still holding huge shares of ITC AXIS BANK L&T and it is sitting on huge profits.The problem is not only with uti Even today many mutual fund houses are repeating the mistake done by UTI.Capital market education is strongly required in this country.If uti shares belong to unitholders the unit holders might have benifited enormously.No amc bothered to educate investors.At the same time i like to point out UTI is better than MORGAN STANLEY.

Sucheta Dalal

2 years ago

More on UTI:

It is also important to remember that post the debacle a committee headed by Mr S S Tarapore, former DG of the Reserve Bank was set up. Mr M G Bhide, former chairman of Bank of India was on the committee.

We learn that this committee provided a report which was so detailed that all it needed was the filing of FIRs against entities responsible for looting UTI.

The report was buried!! NOTHING HAPPENED!

Will Patel & Proloy as questions in the so-called 50th year?? Lets not have fake celebrations when there are so many skeletons in ones cupboard. And I am only scratching the surface here !

Sucheta Dalal

2 years ago

The bizarre comments in support of UTI's fake golden jubilee can only come from UTI itself.

What is the connection with returns earned as mentioned by one commentator? Those returns were earned by the government, while UTI's investors, who held shares for decades lost out heavily. They were virtually thrown out at face value. Meanwhile an investigation into institutional investors using inside information (of UTI trying to borrow from them) to exit at a high NAV -- Rs17+ if I remember right, was quietly dropped.
Those losses are forgotten?

As for bailouts to General Motors or others anywhere in the world, how strange is the comparison? Were those companies split? Did they cease to exit in the form that they were?
UTI Mutual fund is NOT the investment behemoth that Unit Trust of India was before the split. It is one half of a company, operating under a different set of rules. Its life started the day it was spun off as a separate company. UTI MF can jolly well celebrate a decade of its existence or any other milestone. But it cannot claim to be 50 years old.

It also cannot gloss over the unsavoury history of 1999 and 2001 which led to the split.




In Reply to Sucheta Dalal 2 years ago

Well, since you mention General Motors, I suppose you were replying to me, and it was me whom you were accusing of being a UTI employee or insider; needless to say, without adducing any evidence whatsoever. I'm neither. I have not the remotest connection with UTI, save the fact that there happens to be a UTI office within one kilometer of where I live. I haven't even invested in any of their mutual funds to be a fanboy of any sort. But, as a general follower of personal finance topics, I've followed UTI mutual funds' performance, and I have no reservations in recommending them to others, because they are competent and it shows in their performance track record over 5-10 year periods.

Ms Dalal, do you really mean to say that the returns that UTI's mutual fund units produce are pocketed by the government, not UTI investors...? This one is a GEM...! I'm not very sure whether this is really coming from the editor of a principal financial magazine which holds investor camps regularly. If it was not you but someone else who took advantage of your login to impersonate, please let us know! I'll be more than ready to accept it. You know, sometimes young nephews/nieces take advantage and post something unbeknownst to one...!

I find it amusing that someone who argues that UTI MF's fund returns are irrelevant, uses some purported losses to make some sort of argument by asking "those losses are forgotten?". (Although, to my untrained eyes, the fact that some institutional investors exited at a high NAV, shows that they made profits; I don't know how it became a loss. Unless what's meant is that if an investors exits his investments at a profit, it's supposed to be a loss for the fund house, or by some kind of wizardry, a loss for the government itself!)

Ms Dalal, if what you were referring to was not the fund returns, but the fund house's profits, and therefore expressing your angst against the deprivation of common investors who weren't given a share of that, I get more confused as to what you really are alleging...? Are you alleging that UTI generated losses (as a fund house, not on the units which are market-linked) and therefore drained the exchequer through bailouts...? Or are you alleging that UTI generated profits and the investors lost out (remember, you yourself say that it was the government who earned the returns!)...? Could you please clarify whether you are alleging that UTI is loss-making for the government, or whether your allegation is that it's profit-making, and your umbrage is regarding the fact that those profits are not being shared with unit holders?

"Were those companies split?". Oh, now I get it -- so your principal objection is that UTI got split and, therefore, they don't deserve to inherit their history...! Do you apply the same criterion regarding, say, a company's debt? Supposing a debt-ridden company (say, Kingfisher) splits itself into two. Would you then argue that neither of the split neo-entities should be allowed to inherit the debt too...?

More generically, what exactly is the point of your article...? So what if UTI is celebrating its golden jubilee...? Who cares...? So what, if technically they are not the same entity which was founded 50 years ago...? How is it a matter of public interest...? What is the point of your grudge...?

And regarding the "unsavory history of 1999-2001", which government was in power till 2004...? Who should have taken action...? If I remember correctly, Ms Dalal did some stellar work in exposing the machinations of one Ketan Parekh at that time. I hope the "achhe din" of investigations are now back, and armed by the missionary zeal of Messrs Swamy and Modi and Baba Ramdev, now all perpetrators who precipitated the UTI losses would be brought to book. Within 56 months, if not 56 days -- one might guess...?

Sucheta Dalal

In Reply to Proloy 2 years ago

I have no idea whether you know anything about Unit Trust of India, which was set up in 1964. And since you dont, but have long tangential and pointless arguments to make, I won't be wasting my time responding.

Proloy Coomar Pramanik

In Reply to Sucheta Dalal 2 years ago

Well, the least you could do is explain what public interest is served by your article. Your own post was even more pointless. If you have a personal grouse against UTI, why don't you put that up on your Facebook page so that your personal circle can read. This is not the only instance. There is that series going on against Aadhaar, with more episodes written than there were in Saas Bhi Kabhi Bahu Thi. The latest contention being: "when will Nandan Nilekani be arrested for violating personal privacy...?" Some geniuses around! These smack clearly of a public platform being used for some personal axes some disgruntled angst-ers have to grind, flooding with farcical articles.

Pratima Patel

2 years ago

Government's bail out of UTI, once in 1999 and second time in 2001 both turned out to be hugely profitable transaction for the Government only (not for UTI or it's unit holders ).The transaction in 1999 by way of swapping PSU shares for Gsec paper worth Rs 3300 crore resulted in booking profit by the Government when they sold the same set of PSU stocks at more than double ( nearly at three times the cost) in 2003-4. Similarly, SUUTI took over the assets of US 64 and paid back it's liability to unit holders by issuing Bond.
The value of the assets that were handed over to Govt rose to 5 to 6 times enabling the Govt to book profit in many tranches in various years to meet deficits. The remaining value it self ,as on date ,would be many times more than the bail out amount. Not to mention the taking away of the enterprise value of 1300 crore paid by the sponsors of UTI MF to the Govt. So much so, the value of its real estates and the Staff Welfare Fund were also gobbled by the cash starved Govt .UTI was a great organisation by its contribution to start and cultivate the investment cult in India. Why Moneylife considered the celebration as fake is not understood. Generations of investors have benefited by investing in UTI. Not granting the right to celebrate for such an organisation is not fair.


2 years ago

Bank of America, Citibank and General Motors too needed government bailouts. Glad to know that those companies too are "fakes", just like our dear own UTI...! Hopefully, those companies too will heed Ms Dalal's angsty outpourings and give up on their jubilee celebrations out of shame. For the uninitiated, UTIMF today, despite being headless, is one of the best performing mutual fund houses. Many of its schemes figure among the top-rated funds by ValueResearch and other fund rating bodies like Crisil. So much for the righteous angstiness of Ms Sucheta Dalal...!

MG Warrier

2 years ago

Many things stated here are true. But, it is also a fact that absence of professionalism in management caused the slow and steady deterioration of the functioning of a public sector organisation. Wrong persons found their way to top positions in UTI with ease. The institution was ‘destroyed’ from within. Some financial management experts should do a case study of the rise and ‘fall’ of UTI. Even the Unit-64 Scheme is worth studying. That scheme was also ‘destroyed’ by not bringing in innovations necessitated by changes in the environment in which it was existing.

The fine print in T-Mobile’s alleged overbilling scam

The FTC alleges that T-Mobile used third-party billing to collect hundreds of millions of dollars from customers by hiding unauthorized charges in their phone bills about premium texting subscriptions that cost $9.99

T-Mobile USA CEO John Legere was quick to skirt responsibility this week after the Federal Trade Commission (FTC) filed a complaint that said the mobile carrier bilked hundreds of millions of dollars from customers by hiding unauthorized charges in their phone bills.

“…We put in place procedures to protect our customers from unauthorized charges,” Legere said in an online statement Tuesday. “Unfortunately, not all these third party providers acted responsibly—an issue the entire industry faced.”

The complaint, which seeks to recoup millions of dollars for consumers, centers around third-party providers and the clandestine practice of “cramming.”

According to the FTC:

In a process known as ‘third-party billing,’ a phone company places charges on a consumer’s bill for services offered by another company, often receiving a substantial percentage of the amount charged. When the charges are placed on the bill without the consumer’s authorization, it is known as “cramming.

The FTC alleges that T-Mobile used third-party billing to collect up to 40 percent of the total amount charged to customers. The fees were for purported premium texting subscriptions for content such as “flirting tips, horoscope information or celebrity gossip that typically cost $9.99,” according to the complaint.

Often the third-party charges were “bogus,” the complaint further alleges, and never authorized by the customer. And once they came through, the charges appeared buried and ambiguous on a customer’s bill, according to the complaint (See FTC graphic below).

Furthermore, the FTC alleges that in some cases T-Mobile continued to bill its customers “years after becoming aware of signs that the charges were fraudulent.”

“It’s wrong for a company like T-Mobile to profit from scams against its customers when there were clear warning signs the charges it was imposing were fraudulent,” FTC Chairwoman Edith Ramirez said in a statement. “The FTC’s goal is to ensure that T-Mobile repays all its customers for these crammed charges.”

Look to the fine print

In his statement, Legere said that it is T-Mobile’s position that “customers should only pay for what they want and what they sign up for.” Well, it appears what customers sign up for with T-Mobile is the possibility of being scammed or “crammed” by a third-party provider.

From the company’s terms and conditions (Effective March 27, 2014):

Your Device can be used to purchase services and products from third-party providers and Charges for these purchases may be included on your T-Mobile bill. …We use filters to block spam messages, but we do not guarantee that you will not receive spam or other unsolicited messages, and we are not liable for such messages.

And once it appears on the bill (Again, under terms and conditions):

Billing. You agree to pay all charges we bill you or that were accepted or processed through your Device.

Got that? Accepted OR processed. So let’s review: It appears there’s no guarantee you won’t have to pay for unsolicited third-party charges if the charges are “processed” through your phone. Hmm.

Protect yourself

One thing you can do to protect yourself is opt out of third-party purchases. T-Mobile offers the exemption but you have to do it yourself by visiting or calling Customer Care.

For more tips on protecting yourself from cramming and other types of cell phone fraud click here.



What will be special in Railway Budget?

 Speedy trains from main city stations to sights in various historical places would be a boon to tourists and would become very popular

Railway Minister, DV Sadananda Gowda will present his first budget on Tuesday and is widely expected to offer proposals that will ensure users get value for their money!

It may be recalled that he had stated earlier that passengers would be happy to pay more provided there was improvement in services and facilities to make travel a pleasure and not a pain.

There have been broad hints that, after all FDI (Foreign Direct Investments) in Railways would be allowed as this will enable all round improvement; introduce proposals for speed trains; extend tracks to enable great coverage; provide better handling facilities for both domestic and export freight by ensuring priority in movements. A tall order, but doable!

For example, the latest addition to the speedy movement covers the Delhi-Agra trip that was actually achieved in about 90 minutes. This, no doubt, will enable tourists, both domestic and foreign, to enjoy the ride, do the sight seeing in Agra/Delhi and return to base quickly.

Such speedy trains from main city stations to sights in various historical places would be a boon to tourists and would become very popular.

In fact, in the years ahead, Railways ought to be able to provide rail services directly from city centres to the airports. Decades ago, for instance, one could get off at the London Heathrow and take the tube to the city! Similar service linking the metro, mono rail, circular railways etc are available in many cities in the world. Why should India lag behind?

There is one other area that can be thought of and implemented. At the moment, there are no facilities available for Railway Travel Insurance. No doubt, in the case of accidents leading to unfortunate death and/or injury, ad hoc compensation not only the Railway administration but by State governments also.

So, why not work out a scheme that would enable every passenger to take a rail travel insurance at an additional (nominal) charge on the ticket, which may be made optional, and quantum of compensation is pre-determined and publicised?

Finally, while welcoming the FDI to bring in overall improvement in the Railway operations, government ought to seriously consider making it a Corporate body. Additionally, this opportunity to own and operate the railways, even if necessary sector wise, should be offered to Indian corporate giants. In such an event, they would become responsible for laying additional tracks, and/or lay double lines, work out the prospects for greater utilization of tracks, run dedicated freight corridors and offer super-service like a full-service airline on tracks?

Privatisation of Railways would also bring in much needed funds to the government for their enormous infrastructure projects on hand. All these will create tremendous opportunity for expanding the employment potential too.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)


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