CIC cites RTI Act to define fund house as public authority.
A recent decision of the Chief Information Commissioner (CIC) may have far-reaching implications on at least four major asset management companies (AMCs), where the government holding is over 51 per cent.
The CIC has held that UTI AMC is a public authority and has directed it to appoint a public information officer (PIO) and an appellate authority (AA). UTI AMC has four state-run companies - State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BoB) and Life Insurance Corporation of India (LIC) - as sponsors.
In its order, the CIC has said: “Even though there is no specific provision in the Right To Information (RTI) Act that a body owned, controlled or substantially funded by another public authority is also a public authority, yet from the purpose and object of the RTI Act, it is crystal clear that there should be transparency in the functioning of any institution, in which public money is deployed.
The four sponsors are public authorities and when they, in turn, own another entity, such an entity has to be treated as a pubic authority. In the present case, none of the grounds taken by UTI AMC to advance the contentions that it is not a public authority is sustainable.”
Public interest activist Vijay Gokhale had moved the CIC after UTI AMC refused to share information, including the balance sheet, the mode of appointment of directors and reasons for retaining the UTI logo. Gokhale had referred to the Pension Fund Regulatory and Development Authority of India’s (PFRDA) choice of UTI AMC as one of the fund managers for the new pension scheme (NPS).
The pension regulator had selected UTI AMC, along with SBI AMC and LIC AMC, for managing the corpus under the contributory pension system for government employees based on a bidding process.
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The CIC’s decision is likely to affect several other public sector companies like SBI AMC and LIC AMC, which would also come under the definition of public authority. In the case of SBI AMC, 37 per cent is owned by Societe Generale and 63 per cent by SBI. For the NPS, however, all the three fund managers have set up separate companies as mandated by PFRDA.
The RTI Act covers any of the bodies set up under particular Acts of the Parliament. “I am not sure whether SBI AMC would come under the RTI Act. I have not seen the CIC’s decision, so I can’t comment on it,” said Achal Kumar Gupta, managing director, SBI Mutual Fund.
Lawyers, however, said the AMC can appeal against the order. A senior UTI executive said the board would decide on the issue soon.