Central Information Commission
Mr. Vijay Trambak Gokhale vs Uti Asset Management Company Pvt. Ltd. on 6 August, 2008
CENTRAL INFORMATION COMMISSION
Appeal No.2624/ICPB/2008
F.No.PBC/08/41
August 6, 2008
In the matter of Right to Information Act, 2005 - Section 18/19
Complainant: Mr. Vijay Trambak Gokhale
Public Authority: UTI Asset Management Company Pvt. Ltd.
Mr. D. Mohanty, Head Retail Channel
FACTS:
The complainant had sought certain information regarding UTI AMC from SEBI which in turn sought the information from UTI AMC. While furnishing the information, UTIAMC took a stand that it was not a public authority. On receipt of this communication from SEBI, by a letter dated 25.8.2007, the complainant sought for the opinion of this Commission as to whether UTIAMC is a public authority or not under the RTI Act. In the hearing held on 13.6.2008, it was represented by UTIAMC that even though the entire share capital of UTIAMC was held by four Public Sector Banks, UTIAMC was a company registered under the Companies Act and that it was neither financed by the Government nor controlled by the Government. I had asked them to furnish copies of balance sheet, Memorandum and Articles, mode of appointment of directors, profit sharing pattern of the company and also reasons for retaining the UTI logo. They have furnished all the information. The contention of UTIAMC that it is not a public authority is based on the following:
i. It is incorporated under the Companies Act and SEBI, MF Regulations. ii. Its activities are purely commercials like any other AMCs. iii. No special support, exemptions, grants, privileges have been granted by the Government.
iv. Directors are not appointed by the Government but are independent directors in accordance with SEBI, MF Regulations having professional experience in finance and financial services.
v. The company is registered with SEBI for carrying out business as an investment manager of Mutual Fund.
vi. The four shareholders are sponsors and they are in the process of divesting part of their shareholding to public and initial public offer is likely to come up soon by which the sponsors' shareholding would come down to 51% from 100% as of now. vii. Even though the auditors of these companies are appointed under Section 619 of the Companies Act by CAG pursuant to provisions of Section 619B of the said Act, it is not a Government company and the audit report is not placed before the Parliament.
viii. The officers of AMC do not come under the purview of CVC like other Government companies.
ix. There is no profit sharing except that dividend is declared like any other company. x. Since UTIAMC is subject to the control of SEBI, any citizen can seek information regarding UTIAMC through SEBI as it is entitled to seek any information from UTIAMC.1
DECISION:
UTIAMC has been sponsored by SBI, PNB, LIC and Bank of Baroda. Being the sponsors, they are the only 4 shareholders, holing 25% shares each. In other words, UTIAMC is owned by four public authorities. Therefore, a short question that arises for consideration is whether an institution/company wholly owned by a public authority/authorities could be considered to be a public authority in terms of the RTI Act. In terms of Section 2(h) of the RTI Act, any body owned, controlled or substantially financed directly or indirectly by the appropriate government would be a public authority. Even though there is no specific provision in the 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 UTIAMC to advance the contentions that it is not a public authority is sustainable. Just because it is incorporated under the Companies Act it cannot claim that it is not a public authority as many of the public sector companies which are public authorities have been registered under the Companies Act. Most of such companies are engaged in commercial activities like UTIAMC. Most of them are not granted exemptions, grants, privileges etc by the Government. One important fact which goes against the claim of UTIAMC is that its accounts are audited by the C&AG in terms of Section 619B of the Companies Act. In terms of this Section, a company in which one or more corporations owned or controlled by the Government-State or Central- holds more than 51% shares, then it shall be deemed to be a government company for the purposes of audit by the C&AG. In the present case, all the four shareholders are government companies and they in turn hold more than 51% shares in UTIAMC. Since in the present case, the entire share capital of UTIAMC is held by 4 public authorities, I have no hesitation to hold that UTIAMC is a public authority.
In view of this decision, I direct UTIAMC to designate PIOs and AAs and also comply with the provisions of Section 4 of the Act. These directions should be complied with, within a period of one month.
Let a copy of this decision be sent to the appellant and CPIO.
Sd/-
(Padma Balasubramanian) Central Information Commissioner Authenticated true copy :
(Prem Singh Sagar) Under Secretary & Assistant Registrar Address of parties :
1. Mr. D. Mohanty, Head Retail Channel, UTI (UTI Mutual Fund), Registered Office, UTI Tower, GN-Block, Bandra Kurla Complex, Bandra (E), Mumbai-400051
2. Mr. Vijay Trimbak Gokhale, Parvati Nivas, Savarkar Road, Dombivli (East)-
421201 2