"The management of UTI AMC
has delayed the implementation of the decisions of this critical report, to suppress the huge liability arising out of the settlement of long-pending issues and to camouflage and present a better financial statement before the IPO
to prospective investors, which is unfair and misleading… the management and the board of UTI AMC
are in a hurry to push the IPO
at a high price, suppressing large liabilities,” the letter had observed.
These liabilities could amount to an estimated Rs 1,000 crore, with the bulk of it arising out of pension dues to 1,200-odd former employees.
It remains to be seen whether this information will be incorporated in the red herring prospectus. An email sent to UTI MF did not get a response.
The UTI Retired and VSS Employees Social Association (UTIRAVESA) together with the Officers' Association plan to file another writ petition before the Bombay High Court if corrective measures are not taken to address the issue.
"The information on employee related dues and liabilities has to be disclosed in the prospectus to ensure that investors do a fair evaluation of the IPO
pricing," said a person who is part of the retired association.
He added that any decision on the quantum of pay, allowances and benefits pertaining to the demands of the Officers' Association or pension to former employees made after the IPO would be unfair to investors who put in money during the IPO as these subsequent payouts would impact the AMC's balance sheet.
"The retired association has a pension issue which is still lying before the Bombay High Court. Who is going to pay for the liability in case we win the case?" he asked.
A few months back, the central government filed an affidavit, saying it was not a party to the ongoing pension dispute of former UTI employees. This could put the onus on the AMC to foot the entire pension bill.
In January 2019, the ministry of finance, through the Department of Investment and Public Asset Management, had asked UTI AMC to address all pending grievances and ensure that the entitlements of officers of erstwhile UTI are protected under Section 6 (1) of the UTI Repeal Act 2002.
According to Unit Trust of India Pension Regulations, 1994, pension will be payable to all full-time and part-time employees (exceeding 13 hours per week) who have completed 10 years of service.
UTIRAVESA has filed two writ petitions before the Bombay high court, demanding the opportunity to exercise options to avail of pension.
The Officers' Association has also filed a writ petition in the Bombay High Court to restore the retirement age of officers to 60 years, in line with that of workmen staff and employees in the RBI/IDBI and public sector banks. Another writ petition has been filed for restoration of sick leaves and other leave facilities.
The erstwhile UTI had offered a Voluntary Retirement Scheme in 2003 for employees completing 10 years of service. It had constituted a staff welfare fund which became part of Suuti after the former split into two entities.