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Money > PTI > Report August 1, 2001 |
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Govt to closely monitor FIs' investments in private companiesThe government said on Wednesday it would closely monitor investments by financial institutions in equities of private companies in a bid to prevent recurrence of situations like UTI fiasco. Government also directed FIs stick to prudential norms while investing in equities of private companies. Finance Minister Yashwant Sinha, in a meeting with FIs and banks, made it clear that they should strive to run on profitable terms, but have to adhere to prudential guidelines as laid down by the regulators, top officials said. "Any decision which are not prudent will be looked into. Government will not go for 'over-monitoring' but certainly monitor them closely," joint secretary (banking) U K Sinha, who attended the meeting of FM and FIs, said. The move comes after certain abnormalities in the investment decisions taken by UTI, which led to loss in the net asset values of some of its schemes. The Central Bureau of Investigation is probing alleged involvement of former UTI chairman P S Subramanyam in the investment decision in shares of Cyberspace Infosys while LIC, GIC and other banks have also come to the spotlight for alleged investments in shoddy companies. The Insurance Regulator and Development Authority had earlier asked LIC and GIC to adhere to prudential norms while investing in equities. Incidentally, IFCI also suffered huge losses on account of its investments in some companies which failed to repay its loans. YOU MAY ALSO WANT TO READ:
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