Controversy brews over who will head UTI AMC

In this season of controversies, a new one is brewing with the largest stakeholder in the UTI (Unit Trust of India) Asset Management Company threatening to pull out alleging that the Union ministry of finance is thrusting its own candidate as the chairman and managing director of the company which runs India's fourth largest mutual fund.

Political circles in New Delhi and the financial world in Mumbai are abuzz with speculation about the real reason why the powers-that-be are reportedly backing the candidature of Jitesh Khosla, a 1976 Assam cadre officer of the Indian Administrative Service to take over the reins of UTI AMC -- once India's largest mutual funds organisation which today manages assets worth Rs 67,189 crore (Rs 671.89 billion).

Khosla's nomination assumes significance since he is the brother of Omita Paul, adviser to Union Finance Minister Pranab Mukherjee. Paul, who used to belong to the Central Information Service (later Indian Information Service), has worked as Mukherjee's confidante and adviser for decades, including his recent stints at the helm of the ministries of defence and external affairs.

It recently transpired that the American firm T Rowe Price (TRP), which acquired a 26 per cent stake in UTI AMC, has resented the interference from the finance ministry which has been pushing for Khosla, whose candidature had earlier been rejected by the consulting firm that had been engaged to find a successor to U K Sinha, former CMD of UTI AMC who took over as head of the Securities and Exchange Board of India in February this year.

Source: http://www.rediff.com/business/slide-show/slide-show-1-row-over-who-will-head-uti-amc/20110418.htm