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UTI chief's extension cut

Shaji Vikraman

NEW DELHI, July 18

THE change of guard at the Finance Ministry this month has already had an impact on top appointments in the financial sector.

The Chairman of Unit Trust of India (UTI), Mr M. Damodaran, who was in line for a two-year extension to his tenure starting from this month, will now get only a year's extension. Although the previous Finance Minister, Mr Yashwant Sinha, had recommended a two-year extension for Mr Damodaran, his successor, Mr Jaswant Singh, has now struck it down and reduced it to one year, according to Government officials.

The file containing the recommendation for another two-year term for Mr Damodaran was cleared from the Finance Ministry before Mr Sinha's exit from North Block.

If the Government is able to push through the planned restructuring exercise of UTI, including the setting up of a new sponsoring company and an asset management company (AMC) over the next six months or so, the extra one year tenure may well be cut short, officials indicated.

Once the UTI Act is repealed, the Government will cease to enjoy the powers to appoint the Chairman of UTI. Last year, due to the controversial and forced exit of Mr P.S. Subramanyam, an earlier proposal to constitute a search committee to select the UTI Chairman had to be shelved. Considering the circumstances last year, the Government then opted for Mr Damodaran who was Joint Secretary earlier in the Banking Division of the Finance Ministry.

He was appointed as Chairman in July last year.

The Appointments Committee of the Cabinet is now set to clear the new terms of the appointments shortly, they said.

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