MF lobby appoints UTI's Leo Puri as new chairman

A Balasubramanian retains vice-chairmanship

Leo Puri, managing director of India's fifth largest fund house UTI Mutual Fund, has been appointed the new chairman of Association of Mutual Funds in India (Amfi), sources said. Puri replaces Sundeep Sikka, CEO of Reliance Mutual Fund, whose two-year term has come to an end.

The decision was made in Amfi's board meeting on Friday. Notably, Puri's appointment was made without holding an election among members.

A Balasubramanian, CEO of Birla Sun Life Mutual Fund, has retained his vice-chairmanship against expectations that he would be made head of Amfi because generally, vice-chairman is promoted to chairman.

For instance, the current chairman of the Securities and Exchange Board of India (Sebi), U K Sinha, was elected Amfi chairman in September 2010 with Milind Barve, chief executive and managing director of HDFC MF, his deputy. After Sinha vacated his post to become Sebi chief, Barve was made chairman and Sundeep Sikka was appointed vice-chairman. When Barve moved out, Sikka was promoted to be Amfi chairman with Balasubramanian as deputy.

The latest development has not gone down well with smaller fund houses, who had expected to place someone from their own fraternity as Amfi vice-chairman.

Under the present circumstances, for the next two tenures, Amfi chief is likely to be from bigger fund houses.

Sources said Puri’s name was proposed by Amfi's new chief executive C V R Rajendran, which was graciously accepted by members. What went in Puri’s favour was his powerful stature in the industry as well as his reported rapport with the government.

Sources quoted Puri as saying that there should be higher standards of corporate governance among fund houses and there is a need to strengthen the various committees of Amfi.

Amfi has 42 members and the industry has an average asset under management of Rs 13.15 lakh crore as on September 30, 2015..