Mumbai: The Unit Trust of India has recovered around Rs 1,000 crore of non-performing assets from its defaulters during the last four months.

The Trust has also mobilised another Rs 500 crore by participating in the government's disinvestment process and the buy-back programmes offered by various corporates in the last 11 months.

Senior UTI officials said that in an effort to trim UTI's non-performing assets, the institution has been calling up defaulter companies and persuading them to issue post-dated cheques for interest payments. If the cheques bounce for want of funds, UTI files criminal cases under Section 138 of the Negotiable Instruments Act. Around five per cent of the cheques received by UTI have already bounced and the mutual fund has filed cases against over 50 small and medium enterprises.

The officials said: "More significantly, in the case of the big corporates, the Trust will press for a change of management in case they are not ready to clear their dues."

UTI subscribes to the equity of companies, to quasi-equity instruments and to debt instruments. Often, companies do not pay the interest on the debt instruments.

UTI's net NPA level is pegged at 9 per cent. It had sticky debts of Rs 2,600 crore as on June 30, 2001.

Section 138 of the NI Act empowers one to file a criminal case if a cheque is returned by a bank for want of money. But before filing a case, it is mandatory to give a 30-day notice to the company, giving it another opportunity to clear its dues. Once the criminal case is filed, the offender can be jailed for a year and may have to pay a penalty to cover the cheque that bounced. On March 31, 2001, the total number of cases pending across 49 courts in Mumbai was 58,000.

According to the UTI officials, the institution has mobilised around Rs 500 crore by participating in the disinvestment process and corporates' buy-back programmes:
IBP - 6,17,000 shares for Rs 1,551.10 each, totaling Rs 95.7 crore, in the open offer made by the Indian Oil Corporation.
VSNL - 1.3 million shares, fetching Rs 26.3 crore through the open offer.
Abbott Laboratories - 2,41,749 shares for Rs 245 per share, totaling Rs 5.92 crore, to Pharmacia Corporation
GKN Driveshafts Ltd - 14,51,980 shares at Rs 55 per share totaling Rs 7.98 crore to its parent GKN Automotive GmbH.
Indian Resort Hotels - 2,11,396 shares at Rs 70 each through the buy-back offer.