Financial Daily from THE HINDU group of publications
Saturday, Apr 06, 2002
Markets - Mutual Funds
JPC to probe redemption of US 64 last May
NEW DELHI, April 5
THE Joint Parliamentary Committee (JPC) probing the 2001 securities scam will look into all aspects of the redemption of units in US 64 during May last year by the state-owned institutions such as the State Bank of India and also by several corporates.
The JPC, which had also detected irregularities in investment by UTI in private unlisted companies, had sought action by the UTI management in this regard, the Chairman of the committee, Mr Prakash Mani Tripathi, said. The committee had also been told that last year's merger of Global Trust Bank with UTI Bank, stopped later by RBI, appeared to be basically more of an understanding between "two gentlemen Mr P.S. Subramanyam and Mr Ramesh Gelli''.
One of the issues which was discussed during a sitting of the committee here on Friday with the Chairman of UTI, Mr M. Damodaran, was whether the withdrawal by SBI could be owing to fears regarding the problems faced by it.
Mr Tripathi told newspersons that the committee would need a couple of more sittings to cover all these aspects.
Shortly after June 1, 2001 when the UTI announced a freeze on repurchase of units in US 64, a controversy was raised on the withdrawals by the state-owned banks, financial institutions and corporates.
The allegation was that the exit of some large investors from the flagship scheme of UTI a few weeks prior to the June 1 announcement was based on insider information.
In the case of SBI, its chairman is on the board of trustees of UTI.
In the Rajya Sabha last year, the Finance Minister, Mr Yashwant Sinha, had said that the state-owned banks and corporate accounted for redemptions aggregating Rs 1,800 crore in May 2001. Of this, PSU banks redeemed units worth Rs 811 crore during May.
On the UTI Bank-GTB merger, after a deposition by the UTI Chairman and also by the former Chairman, Mr P.S. Subramanyam, it was felt that the tie-up was not a straight one, Mr Tripathi said.
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