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Sinha says his resignation will not solve UTI issue

Rejecting the Opposition demand for a joint parliamentary committee on the UTI muddle, Union Finance Minister Yashwant Sinha on Thursday said that his resignation will not 'resolve' the issue.

He, however, assured the Rajya Sabha that the Central Bureau of Investigation will probe all aspects, including controversial telephone calls from 'higher ups' to former UTI chairman P S Subramanyam.

Sinha said the CBI has begun probe on the former UTI chairman regarding investments in Cyberspace Infosys on the basis of its own information and certainly not under direction from the finance ministry.

"I am not shirking responsibility but the question of accountability has to be discussed in greater detail," he said.

"The issue is not going to be resolved only because Yashwant Sinha resigns," he said.

Replying to a week-long debate on UTI, Sinha clarified that Subramanyam was sacked for his administrative failure on the issue of freeze of US-64 scheme and certainly not for the investment decisions made by UTI.

Besides the CBI probe, the government has already instituted a three-member independent inquiry led by S S Tarapore to go into the entire gamut of UTI fiasco, including insider trading, and hence he did not understand the rationale behind the opposition demand for a JPC probe.

He dismissed the opposition charge that the finance ministry was sleeping when such a major fiasco was taking place affecting 20 million investors in the country.

"We were not sleeping in the finance ministry. We were wide awake."

Accusing Subramanyam of having kept the finance ministry and UTI board in the dark with regard to US-64, Sinha said "at no point of time did former chairman come to finance ministry and discuss the issue."

"If only he had come with the problems (that led to freeze of US-64 on July 2), we would have given some advise. About UTI and US-64, every time we were assured that everything was hunky dory."

Sinha was sought to be put on the dock by the opposition members particularly by Congress member Pranab Mukherjee when he wanted to know who was the complainant on the CBI probe.

"I do not know. I am not the minister in-charge of CBI. CBI does not have to take my permission. CBI has started the investigation on the information it receives. Nobody can interfere in the investigation of CBI," he said amidst acrimonious scenes as opposition did not buy this argument.

When members insisted on a reply to Shiv Sena members allegations about certain telephone numbers, Sinha shot back: "I am not a telephone operator. I do not run a telephone enquiry."

Amidst shouts and counter-shouts from members Sinha said: "The matter is under investigation. CBI will investigate the matter After the investigation, it is in the hands of the court... We must have patience."

Sinha also said that the former UTI chairman was arrested by CBI for his acts of omission and commission.

"But unfortunately a general impression has been created that he has been arrested for not keeping the finance ministry informed."

"This is not a criminal act," he said, adding that he was asked to resign for his administrative failure and the decision to freeze US-64 that had sent shockwaves particularly among small investors.

The House was thrown into turmoil when Sinha refused to yield to leader of the opposition Dr Manmohan Singh who wanted to clarify regarding the charge that UTI had invested Rs 10.73 billion in one Bombay-based company in 1994 whose share value dipped subsequently leading to loss of millions of rupees to the mutual fund.

Today the House was orderly as Sinha yielded first before continuing his inconclusive reply.

Manmohan Singh, taking the floor, said though this matter had been enquired into earlier and that he had been absolved of all charges, he was willing to face any fresh probe.

Singh also said sacking and subsequent arrest of Subramanyam and two UTI executive directors have sent "wrong signals" internationally.

He charged Sinha with trying to "white-wash" the whole issue. "Is he (Sinha) trying to cover up lapses to buy peace with the former chairman," Singh asked.

The leader of the opposition wanted to know what did Sinha do in the last three years to set right UTI as there was no point in taking shelter on the investment decisions taken during the period when he (Singh) was the finance minister.

"It is entirely wrong for the finance minister to suggest that the present crisis of the UTI is because of particular investment in Reliance made in 1994," he said.

"Sinha was 'misleading' the House as these investments had enabled UTI to make profit and not losses," he said.

Sinha sought to dispel the opposition view that Government had done nothing to improve the health of UTI. It has already implemented 10 of the 19 recommendations made by Deepak Parekh Committee on restructuring the mutual fund.

Seven others are under various stages of implementation and the remaining two required amendments to the UTI Act and hence the delay.

One of them pertained to raising the UTI board to 15 members and the other is setting up of asset management company.

An important recommendation of the committee is to reduce the overdependence on equity. The proposal is to have 60 per cent exposure of the fund to debt and remaining 40 per cent on equity. Presently equity exposure was as high as 75 per cent.

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The UTI Crisis

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