UTI: Does top job have to go only to a finmin favourite?

By R Jagannathan

Why does the government want to own a mutual fund and let it go to seed by starving it of legitimate leadership for a year?

The answer, at least in the case of the UTI Mutual Fund, is manoeuvring by insiders in the finance ministry to push their own favourites - even close relatives.

The fund has been without a CEO ever since its previous boss, UK Sinha, was moved to Sebi, the market regulator, as chairman.

But that was a year ago. Since then, UTI Mutual Fund has been a headless chicken, and till recently Sebi did not allow it to launch new schemes because it did not have a boss.

And why does UTI not have a boss? It's because Finance Minister Pranab Mukherjee's powerful advisor, Omita Paul, is said to favour the candidature of her brother, Jitesh Khosla, as CEO of UTI.

The surprising thing is not that Paul wants her brother to head the fund, but that the finance ministry is willing to risk a prolonged leadership vacuum - even for a year - to finally push its favoured nominee.

In fact, just to get over Sebi's refusal to let UTI launch new schemes without a CEO, 10 days ago the government nominated Imtaiyazur Rahman as acting CEO. Rahman was earlier part of a four-member ad hoc committee set up to run the mutual fund after Sinha left for Sebi.

So the current position is this: even after a year of running the UTI in a headless fashion, the finance ministry still thinks it can manage to push its nominee through by holding out for some more time and appointing a temporary CEO.

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