Flip Flops
This has reference to your article “Winter in Autumn” (Moneylife, 4 June 2009). SCUP is retained for those who have completed 58 years of age. Why is it in vogue for one set of people and terminated for another group? I have a copy of the brochure issued at the launch of SCUP in 1993. It says, “Recognising the contribution of senior citizens to the society, UTI plans to pay respect to them by building into its operations special benefits and privileges for this section. Towards this end, as a first step, UTI is launching the Senior Citizen Unit Plan.” Besides, UTI News (volume 7 No2 for April – June 1993), says: “The maximum amount of medical benefit cover of Rs5 lakh is not static. It will be reviewed periodically. For example, after a few years it may be increased to Rs6 lakh or Rs7 lakh to take care of the inflation. So as the cost of the treatments goes up, the medical cover also will be revised accordingly. The minimum amount of initial investment will take care of any extra premium payment in this regard and the member will not be asked to pay any extra amount for this.”

It is evident that the minimum amount of initial investment had sufficient leeway. SCUP Scheme is with UTI MF and not with SUUTI. All NAV-based schemes are vested in UTI MF. The termination circular for SCUP (8 January 2008) gives two reasons—interest rate on investments made by the Scheme has declined substantially, thus affecting its earning potential over the years; and the premium charged by New India Assurance Company also has risen substantially. The circular further stated that returns from such investment portfolio were not self-supporting and that the scheme was not in compliance with SEBI Regulations.

Both reasons appear incorrect. Interest rates declined only after March 2008 and had increased since the launch of the Scheme in 1993. Premium payment to New India starts after the age of 55 years and ceases on attaining 61 years; the premium is paid by redeeming the units. So both reasons for SCUP’s termination are invalid. Moreover, the Scheme provided for an annuity for those who joined the plan before the age of 55 years, at rates to be declared. This annuity was last declared for 2001-02. NAV per unit of SCUP was Rs10.7619 on 31 March 2003 and increased to Rs14.1175 on 31 March 2004. It was Rs23.2257 at termination on 18 February 2008.

UTI MF has been acquiring other mutual funds. UTI’s G-Sec Fund was ranked as the best performing fund in the open-ended gilt fund (one-year) and US95 was the best amongst the open-ended balance fund (three-year) by Moody’s Investor Services. So it is beyond comprehension why SCUP will do badly. KP Ghosh, VP, Department of Investor Services, (Moneylife 17 July 2008) said the termination was with the approval of the Government and SEBI. I have asked SEBI for the information. My RTI query to UTI MF drew a blank. I am awaiting a reply from SEBI.

SCUP provided for a one-time investment which investors made as prescribed. After 15 years, UTI MF has no valid, legal right/ authority to terminate the Scheme unilaterally. UTI MF’s circular of 8 January 2008 dishonestly and falsely says, “When UTI decides to terminate the UTI SCUP, it will be binding on the members and they shall have no rights to persuade UTI to continue the UTI SCUP…The terms of this UTI SCUP, including any amendments thereof from time to time shall be binding on each member and every other person, claiming through him, as if he had expressly agreed that they should be so binding.”

No such terms were there in the Scheme when it was launched nor were they there in the brochure then issued. No new terms and conditions can be imposed unilaterally by any party.

There are valid and reasonable grounds to oppose the termination of SCUP. It might be worthwhile for Moneylife to consider filing a class action complaint. Expenses will be contributed by the members of the Scheme who wish to participate in the case. I will file a case under the Consumer Protection Act in Kolkata as soon as I get the information from SEBI for which cost has been remitted.

I became a member of SCUP in 1993 and a membership was taken in the name of my son. Under the Scheme, units for annuity used to be credited at the day’s NAV, and units for dividend payment and premium paid to NIAC used to debited to the member’s account at the day’s NAV. After the age of 61 years, a member could withdraw the total amount outstanding and no further annuities needed to be paid, but medical benefits would continue as prescribed.

Accordingly, I opted to withdraw the total outstanding amount in my name in November 2001, after I completed 61 years. After constant follow-up, I received the withdrawal amount, but it was much less than what it should have been. I had to file a complaint with the District Consumer Forum, since UTI did not clarify the calculation. I got the decree from the Consumer Forum. But UTI filed an appeal and later on paid an amount almost equal to what was earlier paid to me. This shows how dishonest and investor un-friendly UTI has become.
Vishwanath Poddar, 82/3A, Ballygunge Place, Kolkata, 700019

Sociologists and political analysts have found that people have similar views, whether they belong to the Republican or Democrat parties in the USA or the Congress or the BJP in India. There is little to differentiate between the approach and policies of the Congress and the BJP. Only a slight swing in votes is required to bring a party to power. But no one is interested in changing the electoral system and making elected institutions more representative of what the people want.

Where were the issues? Who challenged the atrocities that were committed? What happened to the honest people and parties who worked hard but failed to get elected? Those who canvassed for the capable and committed, and people with integrity, and didn’t belong to either of the two big parties, told me that the electorate listened, agreed and showed concerns on different issues, but didn’t have the courage to vote for a ‘change’. The subservient Indian culture voted for status quo, safety and security behind the big names. Those who had a message, vision, desire to do something for the country outside the policies and programmes of the big parties didn’t have a chance. The Sensex leapt on the first day of the trading session soon after the election results were announced. The business community was sure that the agenda of the new government would be a continuation of what had created the Indian mega rich.

I have witnessed many elections which have stirred me. This one failed to excite me. I witnessed the total revolution launched by JP (Jai Prakash Narayan). There were elections where the powerful were taken head on and defeated – like Indira Gandhi who lost to Raj Narain or SK Patil getting defeated by George Fernandes. There should have been movements to ensure that people like Arun Bhatia, the former municipal commissioner of Pune, with an unblemished record of performance, made it to the 15th Lok Sabha. Instead, we saw the perpetrators of violence winning in Gujarat, Pilibhit, Kandhamal, Karnataka, especially in Bengaluru and Mangalore. Doesn’t this tell us something? As I write this piece, there is news on the TV channel regarding a Tamil Nadu minister justifying the auctioning of seats in medical colleges with a starting price of Rs50 lakh-60 lakh, which along with the annual fees works out to Rs1 crore. Yes, it’s quite legal because these are seats for NRIs, where the deemed universities can do as they please. But is it right?

Far from taking pride that we have a democracy that works and that the secular forces have won, we must ensure stricter implementation, action, performance and change. The elections are a wake-up call and a time for introspection, not only for the political parties and candidates who lost, but also for the aam admi of India.
Francis Lobo, by email

Your analysis of Genus and Murli Industries was good. On NDTV Profit, Amisha Vora of Prabhudas Lilladher hopes it would cross the previous high before December 2010. These people seem to possess a crystal ball. If the anchor had queried her with more persistence, maybe, we could have got the date and time of the event! Nobody is an expert. Markets may go up; may well cross the 25,000 mark, but there are many ‘ifs’ and ‘buts’. Can you predict monsoons for the next two years? Is she sure that nothing like the subprime crisis will happen in the next two years? What happened to MajorGainZ’s stock picks? Why did the anchor not ask her what to do with the stocks bought after her last recommendation? If management discussion is the only criterion for a multi-bagger, why do we need analysts? What is the difference between Harshad Mehta and this bull? Such people take a supari from the market operators and promoters to sell their maal. This is their business model. Even astrologers predict the Sensex targets, but we know what they are following. Nobody takes them seriously, except those who believe in astrology. But it’s shameful for the heads of well-known research centres to come out with cheap statements at a time when lots of people undoubtedly follow them. Even I am very bullish on Reliance but it will be too early for me to guess where the market would be after one month or a year.
Santosh Mhamunkar, by email

Letters to the Editor can be emailed to [email protected] or
can be posted to:
The Editor, MoneyLIFE Magazine, Unit No. 315,
3rd Floor, Hind Service Industries,
Off. Veer Savarkar Marg, Dadar (W), Mumbai 400 028
or faxed to 022-24442771.
Letters must include the writer’s full name, address and telephone no.
and may be edited for clarity or space.
New Subscription & Customer Service
For new subscription requests, complaints about current subscription
and books, write to [email protected]
or to Subscription Manager, Unit No. 315, 3rd Floor,
Hind Service Industries, Off. Veer Savarkar Marg,
Dadar (W), Mumbai 400 028
or call 022-24441059-60 or fax to 022-24442771.
For information and rates,
email us at [email protected]
or call 022-24441059-60.

  • Like this story? Get our top stories by email.


    We are listening!

    Solve the equation and enter in the Captcha field.

    To continue

    Sign Up or Sign In


    To continue

    Sign Up or Sign In


    online financial advisory
    Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
    online financia advisory
    The Scam
    28 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
    Moneylife Online Magazine
    Fiercely independent and pro-consumer information on personal finance
    financial magazines online
    Stockletters in 4 Flavours
    Outstanding research that beats mutual funds year after year
    financial magazines in india
    MAS: Complete Online Financial Advisory
    (Includes Moneylife Online Magazine)