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August 4, 2001
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Money > Business Headlines > Report August 4, 2001 |
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Subramanyam says govt knew about UTI messBS Bureau Former Unit Trust of India chairman P S Subramanyam, in his bail application on Friday before the special CBI judge, claimed that he had apprised the government on May 18 and June 30 about the state of affairs in UTI. "Left with no alternative even after indicating the same to the government, a proposal was made to the finance secretary, by a letter dated June 30 by the petitioner (P S Subramanyam) in order to further apprise the finance minister of the said situation," the bail application said. Subramanyam also met the finance minister on July 2 "who advised the petitioner to go with the scheduled meeting of the board of trustees on the same day in Delhi for either announcing US-64 at the base price or (to) suspend sales and repurchase." Subramanyam stated in the application that "Finance Minister Yashwant Sinha time and again made enquiries as to why measures were not taken by the financial institutions to invest large sums in backward states, particularly in Bihar and Uttar Pradesh." The bail application said that Subramanyam "therefore felt that he was not committing any crime or wrong doing in clearing the file of Cyberspace Infosys, particularly since it would help UP and the Indian economy." It further said, "it was clearly a business and investment decision taken to help a backward state which was at the initiative of the government of UP. It makes out a clear case of false accusations made against the petitioner and his colleagues and members of the staff of UTI. The petitioner has been made a scapegoat. Not only the petitioner but other members of his team deserved to be released on bail." The court extended the judicial custody of all four accused (UTI executive directors MM Kapoor and SK Basu, stock broker Rakesh Mehta, apart from Subramanyam) till August 7. For the first time, Subramanyam also made it clear in his bail plea that he did not resign on his own; he was asked to step down by the finance ministry. After the market reaction became very adverse to the Trust's decision of freezing the sale and repurchase of US-64 units, "on the night of July 3, he was told on telephone at Bombay by the joint secretary (capital market) to consider stepping down as proposed by the finance ministry." The application also said: "...after he was forced to resign on July 3 in the middle of the night, he had known that he would be made a scapegoat". According to the bail application, initially "his colleagues and subordinates (in UTI) had seen through the proposal of Cyberspace Infosys, and had come to the conclusion that it was not possible for UTI to invest in the company." The subsequent decision to invest though "was purely a business decision which has now gone wrong due to the collapse of the stockmarket," the bail plea said. Subramanyam was also impressed by the fact that the government of UP had extended its hand to partner Cyberspace and surmised that the government would have looked into the veracity and credentials of the promoters. Powered by YOU MAY ALSO WANT TO READ:
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