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Money > PTI > Report July 31, 2001 |
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Sinha accuses UTI of not paying heed to JPC warningUnion Finance Minister Yashwant Sinha on Tuesday charged the Unit Trust of India with not paying heed to the warning of the previous joint parliamentary committee as early as 1993 not to resort to high exposure in equity in its flagship scheme US-64. Replying to a short duration discussion in the Rajya Sabha which remained inconclusive, Sinha gave statistics to say that exposure to equity in US-64 had increased from 28 per cent from 1992-93 to 66 per cent by 1996-97.. At present it stood at 70 per cent at a value of Rs 136.46 billion, he said, adding that the exposure to equity should have been much less as was the case before liberalisation in 1992. He said the exposure of US-64's equity was 34 per cent in 1993-94, 40 per cent in 1994-95, 56 per cent in 1995-96. The finance minister said in the due process the balance sheet of the scheme became equity-oriented and was largely dependent on the fluctuations of the stock market. Asserting that the small investors money had "not been taken out", Sinha said it was only the drop in value of the US-64 units due to the fluctuations in the stock market as it now was mainly equity-based scheme. "A general impression has been created as if this money has vanished. As if some people have pocketed this money," he said adding "let me hasten to add that the value of the stock held under US-64 has declined. But it still has a value and a corpus," he said. Sinha clarified that the 1998 bailout package for UTI was in the form of five year bonds for Rs 33 billion and it was certainly not from the tax payers money as made out by the opposition parties. One of the reasons for the decline in value of US-64 scheme was due to large exposure to public sector undertaking equity. The bailout package was only repurchase of PSU equities at the same value of Rs 33 billion at which UTI had bought the scrips, even though their value had declined by more than half to Rs 15 billion. There is every possibility that at the time of maturity of the five year bond, the value of these PSU shares would go up, he said. YOU MAY ALSO WANT TO READ:
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