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July 10, 2001
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Money > Business Headlines > Report July 10, 2001 |
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No budgetary support for US-64: FMBS Economy Bureau Finance Minister Yashwant Sinha on Monday virtually ruled out budgetary support for the beleaguered US-64 scheme and said the government will investigate if Unit Trust of India had functioned along commercial lines in the last several years and also if the huge redemptions US-64 during April-May this year smacked of insider trading. Speaking to media in a hurriedly convened press briefing, Sinha said, "We cannot go on spending government money (for bailouts). A budgetary support is not a desirable option at the moment." The finance minister also said that a full-fledged enquiry will be undertaken by an independent body to scrutinise the investment decisions of UTI over the last several years. "The results will be shared with Parliament and the people," Sinha said. Sources said Sinha met the PM on Monday to get his views on a probe by the Central Bureau of Investigation. In response to a query whether the probe will extend to the role of IDBI, SBI and LIC nominees on UTI board who were also party to all the decisions taken by the institution, Sinha said, "We are looking at how much information was shared by the UTI management with the board of trustees." The minister also said the government was actively engaged in the task of amending the UTI Act besides considering re-appointing its nominee on UTI's board of trustees. The UTI Act needs to be amended to bring US-64 under the purview of Securities and Exchange Board of India. Sinha, who took great pains explaining the finance ministry's stance vis-a-vis UTI, emphatically denied having been taken into confidence at any stage or any level by the institution on its decision to suspend sale and repurchase of US 64 units on July 2. "Not only was the finance ministry kept in the dark about the decision to freeze US-64, vital facts too were not shared with us," Sinha said. He added that no attempts were made by the former chairman P S Subramanyam and the board of trustees to keep the ministry informed about the financial health of UTI and the simmering problems in US-64. Admitting that even public sector undertakings and government institutions like IL&FS had withdrawn money from US-64 during April-May, Sinha said, "The redemptions had ended on May 31. Had we known about UTI's situation then, we would have done something about it. We would have definitely found a solution by June 30." The finance minister today again sought to allay the fears of small investors by saying that a solution would be worked out by the end of this week. "The small investors need not lose his confidence," he said adding that imparting liquidity would be one of the major constituents of the package. Powered by YOU MAY ALSO WANT TO READ:
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