Cong. demands JPC probe into UTI scam

By Our Special Correspondent

NEW DELHI, AUG. 2. The Opposition today made a reasonably convincing case of Ministerial incompetence against the Finance Minister, Mr. Yashwant Sinha, for his failure to oversee the affairs of the beleaguered Unit Trust of India.

Initiating the debate on the adjournment motion in the Lok Sabha on ``UTI Affairs,'' the senior Congress member, Mr. P. R. Dasmunshi, assailed Mr. Sinha for his failure to find out the truth about the UTI affairs. He demanded the setting up of a Joint Parliamentary Committee (JPC) to probe the affairs of UTI and the US-64 fiasco.

Commenting on what he called the dismal level of governance in the Finance Ministry, Mr. Dasmunshi alleged that there was a deep-rooted nexus between UTI and the corporate houses.

``It is obvious that Mr. Sinha could not control the situation in the UTI. His queries were not responded to though he had tried to ascertain facts... his requests were not complied with,'' he said, adding that ``trust'' was missing from the UTI - ``United Thieves of India.''

There had been several communications to the Finance Minister between March and June by the UTI chairman but nothing was done to retrieve the situation. Mr. Dasmunshi wondered why there were frequent changes of Finance Secretaries and at whose behest they were effected.

The Congress leader demanded ``total security of life'' to the former UTI chairman and three others who were now in CBI custody, and expressed the fear that damning disclosures could endanger their lives.

Holding the Finance Minister constitutionally responsible for the UTI muddle, he said Mr. Sinha should follow the example of Mr. George Fernandes who had resigned when the Tehelka probe was constituted. Cautioning that even the Prime Minister's Office could come in the line of fire, the Congress leader said that the Prime Minister, Mr. Atal Behari Vajpayee, had been misled either by the PMO or the Finance Ministry on the UTI affair.

Opposing the adjournment motion, the Union Law Minister, Mr. Arun Jaitley, said the character of the US-64 scheme was changed from a debt-based fund to the one linked to equity during the 1992-96 period. This change was mainly responsible for the present crisis. Intervening in the debate, he churned out figures to buttress his argument that US-64 was turned into an equity-based scheme and even a minor drop of one per cent in the stock market could spell a loss of Rs. 300 crores for the UTI.

Till 1992, US-64 was a debt-related fund with only 28 per cent of funds being invested in equity-linked schemes but by 1996, nearly 66 per cent of the funds made up the equity component of the scheme. In 1997-98, 70 per cent of US-64 had become linked to equity.

``What were the consequences of this change in its character? It meant if the stock market was up, the net asset value of the US- 64 also went up and if the stock market went down, so did the NAV of the scheme,'' he said. In 1992, total investment in the equity-linked schemes was Rs. 2,905 crores and by 1997-98, the exposure to equity had gone up to Rs. 13,647 crores, making US-64 vulnerable to stock market fluctuations.

Yet another factor for the dismal performance of US-64 was investment of Rs. 4,572 crores for buying shares of the PSUs from which the Government was disinvesting.

In such a scenario, the UTI Board declared handsome dividends in 1994-95, '95-'96 and '96-'97, which ranged from 20 to 26 per cent. ``Obviously, these dividends were not in consonance with profits and the reserves were eaten into,'' Mr. Jaitley said.

The Board could have taken some bona fide decisions which turned out to be erroneous. ``The UTI Board is autonomous and under the UTI Act of 1963 the Government does not have powers to issue directions.''

Mr. Kirit Somaiya of the BJP blamed the Reliance, the Zee TV and other companies for causing a huge loss to UTI. He demanded that unscrupulous promoters be jailed and favoured a complete restructuring of the UTI, the ICICI, the IDBI and other such institutions to strengthen the people's trust in them.

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