The following is for General Information and future case reference.
Appeared in "Times of India", Mumbai edition, dated 11, August'2008, page no. 2.
Keep Smiling ... Hemant Agarwal
‘UTI should come under purview of information act’
Mumbai: The lakhs of mutual fund investors who are worried about their investments in various public sector financial institutions in the country can now heave a collective sigh of relief.
In a landmark order, the Central Information Commission (CIC) has ruled that as the Unit Trust of India Asset Management Company (UTIAMC) is a public authority, it has to comply with the provisions of Section 4 of the Right to Information (RTI) Act.
UTIAMC is the investment manager for UTI Mutual Fund, which, in turn, invests public money in stock markets and debt instruments. The CIC order on August 6 will now make it mandatory for UTIAMC to comply with Section 4 of the RTI Act, which states that public authorities need to maintain their records so that applicants can inspect or even ask for copies.
The order came when Dombivli resident Vijay T Gokhale approached the CIC after UTI and SEBI replied to his RTI queries, stating that UTI was not a public authority.
“I approached the commission after UTIAMC replied that its three entities, UTI Mutual Fund, UTI Trustee Company and UTI Asset Management Company, did not fall under the ambit of the RTI Act,’’ Gokhale pointed out.
When the case came up for hearing before the CIC, UTI officials took the stand that theirs was not a public authority. “Though the entire share capital of UTIAMC was held by four public sector banks, UTIAMC was a firm registered under the Companies Act and that it was neither financed by the government nor controlled by it,’’ a UTI official said.
The CIC then asked them to furnish copies of the balance sheet, memorandum and articles, mode of appointment of directors, profit-sharing pattern of the firm and also reasons for retaining the UTI logo.
UTIAMC contended that it was not a public authority as it was incorporated under the Companies Act and SEBI. “Also, the directors are not appointed by the government but are independent directors in accordance with SEBI. It is not a government company and the audit report is not placed before Parliament,’’ the UTIAMC said.
The CIC, in its order, said UTIAMC had been sponsored by public sector institutions and banks such as SBI, PNB, LIC and Bank of Baroda. “UTIAMC is owned by four public authorities. An institution wholly owned by a public authority could be considered a public authority under the RTI Act,’’ the CIC order said.
“From the purpose and object of the RTI Act, it is crystal clear that there should be transparency in the functioning of any institution in which public money is deployed,’’ the order said. The CIC, while passing the order, directed UTIAMC to designate PIOs and appellate authorities to comply with the provisions of the RTI Act in the next 30 days.