In another development, term-lending institution ICICI has said that it has a number of independent directors on its board but would encourage greater interaction with UTI, which need not necessarily mean that the Trust should be given a position on the board. UTI has more or less agreed to ICICI's suggestion of improving interaction through other initiatives rather than a board slot. Incidentally, ICICI chairman N Vaghul is also on the UTI board.

"Our aim is to enhance interaction with companies in which we have a significant stake and towards this effect we wrote to several of them. The exercise of sending letters to all corporates was meant to gauge how we can improve interaction. Some have reacted positively. For example, the Reliance group has agreed to oursuggestion for enhancing interaction and is open to us taking a board slot with regard to Reliance Industries and Reliance Petroleum. We will now take a view on whether we want to go ahead or not," said UTI chairman PS Subramanyam.

Reliance Industries currently has two institutional nominees on its board, one from ICICI and the other from GIC.

Subramanyam said that as far as ICICI was concerned, it was felt that as the institution already had a number of independent directors, interaction could be enhanced without having to take a board seat.

"The idea is not to thrust ourselves on any company. We want to encourage corporate governance in a positive manner," said Subramanyam.

"We are still in the process of receiving responses from other companies and would take a view on our stand only after that. We have not nominated any person till now on any company's board so the question of a corporate rejecting our move does not arise at this point of time. Certain companies, we presume, will take a proactiveapproach on their own," he added when queried on whether any had rejected the UTI proposal.

He added that the government had not in any manner discouraged the UTI initiative. "The corporate world should view our initiative in a positive manner," said Subramanyam.

The UTI chairman had on February 27 told The Financial Express that the Trust would take up in right earnest the finance minister's statement in his budget speech of creating an environment of corporate governance by seeking a board slot in companies where it had more than a five per cent stake. Subsequently, UTI sent out letters to all companies seeking their views on its proposal to enhance interaction. However, there were cries of protest in the media from certain companies. To this, UTI made it clear that it was not forcing itself on a company if the situation did not so demand.

Subramanyam has been trying to give a major push to corporate governance ever since he took charge of the country's largest mutual fund, which has a corpusin excess of Rs 60,000 crore under management.

Soon after the reserves of UTI's flagship US-64 dipped into negative territory, Subramanyam decided to get to the bottom of the poor scrip performance of some of the top corporates in the country in which UTI had invested. All corporates where UTI had a large holding were asked to come and give detailed presentations to the Trust after the announcement of their results. The Trust was keen to know the reasons for the dismal performance and the measures being considered to enhance performance.