The Hindu Business Line : Decks cleared for future transfer of UTI-I assets

THE way has been cleared for the future transfer of properties and other assets including shares held by the Specified Undertakings of Unit Trust of India (SUUTI) to the Government after all the schemes under it are wound up at a later date.

The Ministry of Finance has issued a notification to do away with the requirement of payment of stamp duties and income-tax when the properties and other assets are transferred to the Government when the schemes are finally wound up after meeting the dues of the investors.

It is expected that the scheme would be wound up within a couple of years.

SUUTI, commonly referred to as UTI-I, housed all the assured return schemes of the erstwhile Unit Trust of India after the latter's bifurcation into UTI-I and UTI-II, the latter being the UTI Mutual Fund.

"The Government had not envisaged a situation at the time of the bifurcation where the Specified Undertakings of UTI might have to one day transfer its assets and properties to the Government. The notification has been issued in view of the possibility," a senior official of the Finance Ministry said.

The UTI (Transfer of Undertakings and Repeal) Act, 2002, through which the erstwhile UTI was bifurcated had provided that when all the schemes under SUUTI are wound up, the administrator of the undertaking would have to demit office and pass on the assets and properties to a body that is notified by the Government.

The Act had also provided that during the initial transfer of asset from the erstwhile UTI to SUUTI, the latter would enjoy exemption from payment of stamp duty and income-tax.

However, the possibility of a subsequent transfer to the Government was not visualised.

Officials also clarified that the issuance of the notification should not be in any way construed to be affecting the status of the present SUUTI administrator, Mr M. Damodaran.

"This notification is just to remove any difficulties that might arise at a later date," the official said.

He pointed out that the repeal Act had provided that any notification for removal of future difficulties arising out of the legislation has to be issued within two years from the date of the enactment of the Act. The Act came into force on Oct 29, 2002 and the present notification - the UTI Transfer of Undertakings and Repeal (Removal of Difficulties) Order, 2004 - was issued on October 28, 2004.