BUSINESS

US-64 units to be treated as bonds

MUMBAI JAN. 28. The Unit Trust of India today decided that the units of Unit Scheme-64 (US-64) issued on or before June 30, 2001 either held by the original unitholders or by the buyers of these units in the secondary market after reopening of trading today (that is, January 28) will be treated as five-year, fixed-coupon, tax free, tradable bonds with effect from June 1.

The bonds will mature on May 31, 2008. "The coupon payable on this instrument would be finalised soon,'' said M. Damodaran, Chairman, UTI, here, today.

Secondary market trading in US-64 has commenced today. The buyers of US-64 units from the secondary market for Category A units (units held on June 30, 2001 up to 5000 units per investor) would be able to repurchase at Rs. 12 and Category B units (units held on June 30, 2001 in excess of 5000 units) would be repurchasable at Rs. 10 on May 31. Thereafter, the UTI would be effectively purchasing the units, which will be eligible for conversion into tax-free bonds as on May 31 and June 1.

The buyers of units under Category C, that is, units bought from the secondary market during November 15, 2002 to January 22 will continue to be traded and repurchasable at the Net Asset Value (NAV) based price.

The investors who bought the units from the secondary market before November 15, 2002 has been transferred to Unit Scheme 2002, which is an open ended NAV based scheme.

Mr. Damodaran said the existing special price repurchase and the NAV based price repurchase facility for unit holders in below 5000 units and above 5000 units respectively, will continue.

New AMC formed

<167,1p,1>The earlier announced UTI-II will be known as UTI Asset Management Co. (P) Ltd. and Mr. Damodaran is appointed as the Chairman and Managing Director of the new entity. However, he will continue as the Chairman for UTI-I also till a new Administrator is appointed.

The board of directors met here today and announced the composition of UTI Trustee Co. (P) Ltd and UTI Asset Management Co. (P) Ltd. C. Ramachandran, former Secretary (Expenditure) Ministry of Finance, Union Government, was appointed as Chairman of UTI Trustee Co. (P) Ltd. Other Trustees are: M. P. Radhakrishnan, former chairman, SBI, Kanta Ahuja, former vice-chancellor, University of Rajasthan, I. D. Agarwal, Chairman, OTCEI and Pritam Singh, Director in-charge, IIM, Lucknow.

Mr. Damodaran was appointed as Chairman & Managing Director of UTI Asset Management Co. (P) Ltd. Other board of directors are: S. H. Bhojani, Partner, Amarchand Mangaldas & Suresh A Shroff & Co Advocates and Solicitors, J.S. Mathur, former Deputy Comptroller and Auditor General of India and B. D. Sumitra, DMD and Chief Financial Officer, SBI.

Prior to this, the Government signed an agreement with SBI, PNB, BOB and LIC on January 15 to operationalise the Unit Trust of India (Transfer of Undertaking and Repeal) Act 2002.

As per the repeal Act, 22 schemes (US-64 and all assured return schemes) will be transferred and should vest in an Administrator. UTI AMC Co. will mange 47 NAV based, SEBI compliant schemes with effect from the appointed day, February 1.

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