The Hindu Business Line : Ministry rapped for failure to avert US-64 fiasco

THE Finance Ministry has come under flak from the Joint Parliamentary Committee probing the securities scam for its failure in taking corrective measures that could have probably averted the US-64 fiasco. UTI had announced a freeze on sale and repurchase of its flagship US-64 in July 2001.

``Even if (the then) UTI Chairman (Mr P.S. Subramanyam) did indeed keep everybody in the dark, as Finance Minster Mr Yashwant Sinha told the Rajya Sabha, the committee finds the Ministry did little to bring itself out of the darkness, as it had not instituted any formal mechanism to keep itself informed about the health of US-64 scheme,'' the JPC report tabled in Parliament today said. JPC said that the Finance Ministry could not absolve itself of its statutory responsibilities and accountability to Parliament by stating that the management of UTI was autonomous.

Referring to a letter of the UTI Chairman on June 30, 2001, to the Finance Secretary Mr Ajit Kumar, the committee said it had stated that the UTI board would meet on July 2 to consider two options — to freeze US-64 redemptions and convert US-64 to net asset value-based scheme.

``Quite obviously, this was a very important piece of news and the Finance Secretary should have acted immediately,'' it said, adding he could have evolved methods to avoid redemption crisis and also discussed the matter with the Finance Minister.

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