Sinha orders probe into UTI investment

By Our Special Correspondent

NEW DELHI, JULY 9. The Union Finance Minister, Mr. Yashwant Sinha, today announced an independent, comprehensive inquiry into the investment patterns of the Unit Trust of India (UTI) over several years. It will also find out if there was any insider trading (availability of advance information) during the redemptions of US-64 in April and May this year.

He, however, ruled out his resignation on the US-64 issue though he said, ``constitutionally, the buck stops with me as I am responsible to Parliament and the people of India on what goes on in the capital and financial markets.''

About his possible resignation, he said that stage had not yet been reached adding ``let me assure you that if at any stage my conscience tells me to take moral responsibility for any action which is under my charge, I will not fail to oblige you.''

At a hurriedly called press conference here, Mr. Sinha said the details about the inquiry would be announced soon since the first task before the Ministry was to ``restore investor confidence in UTI''. The Ministry was awaiting the proposals from the UTI Board about restructuring the US-64 scheme, which could be made available by the weekend.

To a specific query, he said lifting of the freeze on sale and repurchase of US-64 should form part of the proposed package.

Meeting inconclusive

UNI reports from Mumbai:

The meeting of the UTI Board of Trustees remained inconclusive here today as the management sought more time to find out alternatives, aiming at providing an exit route to small investors and also restore investor confidence inits flagship scheme US-64.

The Board discussed various alternatives, including a proposal to split the US-64 scheme into two asset constituents of equity and debt and a partial escape route at par value of Rs. 10 a unit. However, the Board felt it needed further information to firm up its decision before recommending alternate proposals to the Government. The Board would meet again in the next couple of days to continue the discussions, an official said.

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