The trust has also mobilised another Rs 500 crore by participating in the government’s disinvestment process and the buyback programmes offered by various corporates in the last 11 months.

Senior UTI officials say in an effort to trim UTI’s NPAs, 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 (NI) Act.

Around 5 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 add: “More significantly, in the case of 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 debt instruments. UTI’s net NPA is pegged at 9 per cent. It had sticky debts of Rs 2,600 crore as on 30 June 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 a 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 31 March 2001, the total number of cases pending across 49 courts in Mumbai was 58,000.

The UTI officials say the institution has mobilised around Rs 500 crore by participating in the disinvestment process and the corporate’s buyback programmes. UTI had sold 6,17,000 equity shares of the total equity of IBP Ltd for Rs 1,551.10 per share in the open offer made by the Indian Oil Corporation for a consideration of Rs 95.7 crore. The trust had also sold 1.3 million shares of VSNL and fetched Rs 26.3 crore through the open offer.

UTI has mobilised around Rs 5.92 crore by selling 2,41,749 shares of Abbott Laboratories for Rs 245 per share to Pharmacia Corporation and 14,51,980 equity of GKN Driveshafts at Rs 55 per share to its parent GKN Automotive GmbH for around 7.98 crore. It also sold 2,11,396 share of Indian Resort Hotels at Rs 70 through the buyback offer.