U T I Discussion to be taken up in Lok Sabha today

The ongoing saga of U T I enters an interesting phase, when the Lok Sabha takes up the same for an in-depth discussion through an adjournment motion and the whole nation will for sure wait for the outcome of the same with bated breath. The motion will be, admitted by the Speaker G M C Balayogi, to be followed immediately by a discussion, which is likely to be over by the evening. And the P M’s reply on the recently Agra summit will be taken up on Friday. The UTI issue has been rocking the Rajya Sabha for the last two days, with the Opposition expressing dissatisfaction over the explanation given by Finance Minister Yashwant Sinha and sources said that members could give notices for the motion by 10:00 AM on Thursday.

A lot will decide who should move the motion. The debate on the Agra Summit in the Lok Sabha was expected, to be completed by Wednesday night AND Vajpayee will reply to the discussion immediately after the Question Hour on Friday. Earlier, the Prime Minister was to reply to the Summit debate on Thursday, but in view of the adjournment motion on UTI, he will reply on Friday.

36 UTI schemes run negative reserves

The Unit Trust of India (UTI), which is in deep trouble over the US-64 fiasco, seems to be heading towards a bigger crisis as 36 schemes (excluding US-64) together run a negative reserve and surplus of Rs 5,190.74 crore as on June 30 this year. 15 of these schemes are monthly income schemes, but the U T I chairman M Damodaran said that we would adopt a wait-and-watch approach as regards raising the redemption limit to 5,000 units.

Under the new plan announced July 15, sale of new units continues to remain suspended. Thus, on the cards is the UTI’s commitment to turn US-64 fully net asset value based and abide by the guidelines of the Securities and Exchange Board of India (Sebi) from January 1, 2002 and also, on the cards are new schemes that would soon be offered to investors.

According to UTI, the preliminary reports from all the UTI branches across the country, the total number of repurchase requests received on Tuesday, were 3,865 covering only 56.39 lakh units and average units per application works out to 1,459 units, suggesting that only the small investors might have come forward for repurchase of their holdings.

A UTI official in Kolkata said that maybe the word did not get around properly that the redemptions opened today. Maybe investors in the scheme felt that they should wait and watch for some more time before redeeming their investments and according to Mr Damodaran, there would be overall strengthening of the fund management activities and that the fund major would resort to active participation in stock market which it had suspended since May onwards.

UTI officials in Kolkata, however, did not have the final tally of the value of units redeemed on Wednesday. One official said 69 applications worth Rs 6.09 lakh had been received up to around 2pm. An elderly investor in Kolkata said that he was claiming the redemptions even if it means a loss to me, because I would rather invest it in the post office to be on the safer side.

UTI was quick to compare the redemptions requests for US-64 in the first feq days with those of the previous years.

PMO role in UTI scam denied by Vajpayee

The Prime Minister Atal Bihari Vajpayee on 01/08/2001 Wednesday said the Prime Minister's Office had nothing to do with the UTI muddle and offered to hold an inquiry into it if necessary, intervening in the UTI debate in the Rajya Sabha, he said his attention had been drawn to some issues relating to the UTI raised in the House by Leader of Opposition Manmohan Singh when he was not present and also stated that he wanted to clarify on these issues, Vajpayee denied that the PMO had anything to do with the muddle and stated that an inquiry could be held into it if necessary