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Sunday, September 30, 2001

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UTI burns hands in entertainment -- Investments depreciated 78 pc, JPC told


Ambarish Mukherjee

NEW DELHI, Sept. 29

THE value of investments made by Unit Trust of India (UTI) in entertainment companies during the last two years have depreciated to the extent of 78.32 per cent by end of June this year.

Out of the 17 companies in which UTI had made purchases, the investment in at least three were not recommended by the trust's own Equity Research Cell (ERC). These are Broadcast World Wide, Numero Uno and Moving Pictures. The purchases were made on the b asis of recommendations of the fund managers.

The trust had acquired shares of 17 entertainment companies at a total cost of Rs 1,028.87 crore during 1999-2000 and 2000-2001. As per UTI's own estimates, the value of the entire stock stands at Rs 222.99 crore as on June 30.

UTI has provided this information to the Joint Parliamentary Committee (JPC) probing the March 2001 securities scam and later given the additional responsibility of looking into the affairs of UTI and the situation which led to the suspension of sale and redemption of its flagship US-64 units on July 2 this year.

In its portfolio of entertainment company stocks, it is the investment in Zee Telefilms which has dragged down the trust. UTI had acquired 1,50,73,310 equity shares of Zee Telefilms at a cost of Rs 837.4 crore. As per the information provided by the trus t to the JPC, the value of this investment came down to Rs 179.48 crore on June 30, 2001, a depreciation of Rs 657.92 crore.

The second largest loss is on account of Crest Communications. UTI had acquired 11,55,408 equity shares of Crest Communications at a cost of Rs 52.04 crore which has come down to a meagre Rs 7.67 crore, marking a loss of Rs 44.37 crore.

The decision to invest in Sri Adhikari Brothers and TV Eighteen has also hit the trust badly. Investments of Rs 44.52 crore and 40.43 crore made by the trust in Shri Adhikari Brothers and TV Eighteen have been valued by the trust at Rs 5.86 crore and Rs 5.24 crore on June 30, a depreciation of Rs 38.66 crore and 35.19 crore respectively.

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