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July 23, 2001
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Money > Business Headlines > Report July 23, 2001 |
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CBI to probe US-64, NCD arbitrageBS Markets Bureau In an interesting twist to the ongoing Unit Trust of India controversy, the Central Bureau of Investigation is believed to be closely looking into the corporate arbitraging between non-convertible debentures and investments in US-64. The investigating agency is said to be looking at NCD placements in the recent past to unearth transaction patterns, specifically on whether there was any evidence of "undue influence" in the private placement process. In a related development, CBI officials are also learnt to be looking into trades of Cyberspace Ltd on the BSE and NSE. According to sources familiar with the development, a string of corporates have been making money-with implicit support of some UTI officials-by placing NCDs with UTI and using the proceeds to subscribe to US-64 units. In other words, these corporates over the years have raised money from UTI at a cheaper cost (through placing bonds) and used the same money to invest in US-64, thereby making a neat spread. Corporates not only earned hefty dividends at the end of the year, but also made money by selling the units at pre-determined repurchase prices. On the other hand, UTI officials are said to have actively connived in this operation as corporate purchases into US-64 were used by the Trust to show "active corporate support for US-64." Some of these corporates have now sold their US-64 units, suspecting that the units would soon be NAV linked. Meanwhile, officials of the investigating authorities are reportedly going through BSE and NSE documents to get details of transactions on Cyberspace, especially with respect to deals under the ALBM segment on the NSE. Opposition may move no-trust motion The Opposition might bring an adjournment motion or a no-confidence motion against the NDA government in Parliament on the US-64 issue. The motion, which could be brought as early as Wednesday, represents a serious embarrassment for the government because the entire Opposition is likely to unite on this issue. Powered by YOU MAY ALSO WANT TO READ:
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