Damodaran is the new Sebi chief

NEW DELHI: IDBI chief M Damodaran will be the new chairman of the Securities and Exchange Board of India. He will succeed GN Bajpai, who relinquishes office today.

Joint secretary, capital markets in the ministry of finance, UK Sinha, will now take over as the new chief of UTIAMC. The appointments have been cleared by the Prime Minister’s Office and are expected to be announced on Friday.

Mr Damodaran’s appointment has ended weeks of speculation over who would succeed Mr Bajpai as the market regulator.

A 1971 batch IAS officer, Mr Damodaran was earlier additional secretary, banking, in the finance ministry, before he took over as chief of UTI AMC as well as the administrator of the Specified Undertaking of UTI, the two entities which were formed following the collapse of UTI after the ‘01 stock scam.

The government had to step in with a bailout package for UTI, which included ring fencing US-64 and the assured returns schemes.

Mr Damodaran successfully turned around UTIAMC, restored investor confidence in the country’s largest mutual fund and ensured the orderly closure of the popular and country’s oldest scheme, US-64. He also reformed UTIAMC’s working sytle, making it more responsive to consumers. He sanctioned higher pay scales for a section of the UTI work force, which was higher than the usual public sector pay scales.

Mr Damodaran was also given the additional charge of scripting the makeover for the troubled IDBI, in October ‘03. As a result, Mr Damodaran resigned from UTI in May ‘04. Mr Damodaran then went on to merge parent IDBI with IDBI Bank, pitching the institution into a competitive position vis-a-vis the leading private banks and State Bank of India.

During his tenure at the helm of UTIAMC, Mr Damodaran was also embroiled in a controversy over UTI Bank, because of which the managing director of UTI Bank, PJ Nayak offered to quit. Mr Nayak’s proposal to offer capital to foreign investors met with opposition from a section of the UTI bank board.

The markets perceived the ensuing impasse as a fall-out of a move by UTIAMC to take control of UTI Bank. But this was vehemently denied by Mr Damodaran himself. Mr Nayak also withdrew his resignation.

The appointment of UK Sinha as the chief of UTI AMC, completes most of the key appointments in the country’s financial sector, except the PFRDA. SB Mathur, LIC’s former chairman, has already been appointed as the Administrator of the Specified Undertaking of UTI.