UTI Asset Management Company has agreed to include the ‘disputed future liability’ of about ₹1,250 crore in the Red Herring prospectus for its initial public offering.

The move comes after the Bombay High Court directed the fund house to include the quantum of contingent liabilities arising due to pension and other dues in the prospectus for the ₹3,000-crore IPO.

In July, the UTI Retired and VSS Employees Social Association along with the Officers’ Association filed a writ petition before the Bombay High Court submitting that the draft prospectus for the IPO failed to highlight the contingent liabilities arising out of employee-related dues.

The Employees Association has now decided to withdraw the petition on the assurance from the AMC that it will include the liabilities in the prospectus.

However, sources in the UTI claimed that contingent liability number will remain the same and it has only been agreed to disclose it ‘under dispute’.

An email sent to UTI MF remained unanswered.

Between 1994 and 1997, the erstwhile UTI had given two options to certain categories of employees to accept a newly introduced pension scheme or continue with the existing provident fund scheme.

However, in 2001, a memorandum of settlement was entered into by the erstwhile UTI with the All India Unit Trust Employees Association to delink the compensation package of its employees from those of RBI employees with effect from January 1, 2001.

But some employees moved the Central Government Industrial Tribunal, Mumbai (CGIT), seeking an additional, or a third, option to switch from the provident fund scheme to the pension scheme with effect from 2001 as allowed for RBI and IDBI employees.

The CGIT passed an award directing that such an option be given to the workmen. However, the Bombay High Court set aside the award of the CGIT. A petition filed by the Employees’ Association in the Supreme Court against the Bombay High Court order is pending.

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