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Sinha rules out immediate resignation over UTI muddle

Union Finance Minister Yashwant Sinha on Monday ruled out his immediate resignation on moral grounds over the UTI muddle, saying that stage has not reached yet.

"I don't think that stage has been reached yet," he told reporters when specifically asked whether he would resign owning moral responsibility for the UTI crisis.

"But let me tell you that at any point of time if my conscience suggests that I should not continue in the government taking moral responsibility for anything that goes wrong, I will not refuse to oblige," Sinha said.

He said that he was not trying to shirk responsibility. "Constitutionally I am responsible to Parliament and to the people for whatever goes on in the capital market and financial market generally."

"Let there be no doubt .... I am not trying to shirk that responsibility in any manner," he said, clarifying that though UTI has been set up by an Act of Parliament, government has no direct role in its management and supervision.

Sinha said that the government only appoints the chairman of the UTI in consultation with IDBI and that ministry of finance is not directly represented in the UTI board.

Therefore, matters pertaining to board and agenda papers and the like are not shared with the government, he said, adding that even the issue of giving policy directions rested with IDBI.

Regarding issues pertaining to regulations, even that power did not rest with the government, he said.

Narrating the sequence of events that led to the suspension of UTI's flagship scheme US-64, Sinha said that the government was concerned over reports about happenings in UTI during April-May this year and sought details from its chairman, both, orally and in writing.

But the then chairman P S Subramanyam gave an impression that everything was alright and under control and that there was no reason to worry, he said.

Regarding events before the UTI board meeting on July 2 that decided suspension of US-64, Sinha said that the first indication of the problem in UTI was mentioned to joint secretary J Bhagwati during a 'casual chat' by the chairman on June 29.

On June 30, which happened to be a Saturday, the then UTI chairman delivered a letter to finance secretary indicating that the board proposed to take a decision on the suspension in the face of huge redemption in April-May and because of fears of reserves turning negative.

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The UTI Crisis