Damodaran may step down from UTI helm

With govt against extension

Meleveettil Damodaran, chief of UTI Asset Management Company and the administrator of UTI-I, is likely to step down from the twin posts in January following the government's decision against granting him a fresh extension.

The move follows his appointment as the chairman and managing director of Industrial Development Bank of India, where he has been appointed for a three year term till 2007.

The government is in the process of commencing a search for a new head of UTI AMC and UTI-I. A decision on splitting the posts is awaited.

Damodaran could not be contacted for comments since he is out of the country to attend a crucial meeting of Dabhol lenders.

The finance ministry is of the opinion that Damodaran, an Indian Administrative Service officer, should focus exclusively on restructuring IDBI which would be converted into a commercial bank from next month. Apart from the conversion, the restructuring entails a merger of Industrial Investment Bank of India and IDBI Bank with IDBI.

While a decision to merge IDBI Bank with its parent was announced by Damodaran recently, the government is keen on IIBI being part of the IDBI. A due diligence exercise is expected to commence shortly.

Damodaran took over as the head of the erstwhile Unit Trust of India in 2001 amidst the controversy regarding its investments and a freeze on its flagship US-64 scheme.

During his tenure the UTI Act was repealed and the mutual fund was split into two. While UTI I took over all the assured return products, including US 64, the UTI AMC was turned into a Sebi-compliant mutual fund and has now the highest amount of assets under management.