The U T I continues to be besieged by new woes and the same would continue to shake it for many more days to come. The latest is that the US-64 prices took a downhill route, a route, which will remain downhill, and on 24/7/2001 US-64 prices took a battering in the form of a 65 paise crash, or 7 per cent, to close at Rs 8.50.

During the intra-day session, US-64 prices tumbled 90 paise or nearly 9 per cent to touch a new low of Rs 8.25 on the National Stock Exchange. About 82,700 US-64 units were transacted in 102 trades as against 44,627 units in 89 trades on the previous day and the reason is simply simple >> the arrest of former UTI chairman P S Subramanyam and two other officials because of their alleged role in investing in an obscure IT company, Cyberspace Infosys was what triggered heavy sell-off in US-64 units. On Monday 23/7/2001, UTI suspended three officials - M M Kapur, S K Basu and Prema Madhu Prasad for their alleged role in sanctioning the purchase of Cyberspace Infosys shares.

Thanks to yesterday’s fall, US-64 prices have declined by Rs 1.50 or 15 per cent in the past six trading sessions, after new chairman M Damodaran announced a bailout package on July 15 assuring a minimum repurchase price for a maximum of 3000 units.

The repurchase price has been set at Rs 10 in August, when repurchases open, and increases by 10 paise every month till May 2003 and investors seem to fear that the recent financial mess in UTI will adversely impact the performance of US-64 even in fiscal 2001-02 and that it would further erode its net asset value. Currently, the NAV of US-64 is around Rs 9.50 to Rs 9.75, said sources.

More shaking news >> UTI not only culprit in Cyberspace scam

The Cyberspace drama of twists and turns took a new form with the starling revelation that apart from the UTI two Indian biggies also fell for the beauty and charm of the defamed Cyberspace. The two other biggies are hold your breath >>

public sector mutual funds - LIC Mutual Fund and GIC Mutual Fund - and also Reliance Mutual Fund which bought the stock at high levels around the same time.

Cyberspace topped the list of holdings of General Insurance Corporate’s mutual fund scheme, GIC Growth Plus II, accounting for 9.38 per cent at Rs 2.96 crore till January 2001. Nine of LIC Mutual’s schemes invested in Cyberspace. Reliance, too, bought into the stock, but it turned out to be the smartest of the lot: it held the stock only for a very short period, probably smelling the lemon before it turned putrid.

It appears GIC was simply smitten by Cyberspace and the Growth Plus II had an investment of Rs 2.28 crore in this dubious company in March 2000 and the stock was one of the top holdings with an exposure of 10.22 per cent. "In fact, GIC Growth Plus II is the worst-hit since Cyberspace was its top holding as recently as January 2001, it’s a small scheme of about Rs 30 crore and Cyberspace accounted for almost 10 per cent of its portfolio and since then its exposure has only gone up despite the dip in price, which means that the fund bought more at lower levels," says Dhirender Kumar of Value Research, an organisation that tracks MFs.

The LIC too got sucked up by the fatal charm of Cyberspace and it was sure was a long-term one > it had stuffed nine of its portfolios with the stock, the stock was present in an assortment of income and equity funds with a cumulative investment of Rs 7.06 crore. "In fact, LIC MF’s Dhan 80CCB(2) had to write off some amount in the stock in March 2001," Kumar says.

Reliance Vision, the Reliance MF, had also been attracted by Cyberspace’s stunning performance in the stock market. In March 2000, when Cyberspace had hit an all-time high of Rs 1,374, Reliance Vision invested Rs 2.50 crore in the stock, which accounted for three per cent of the portfolio. But its affair with Cyberspace was very short - it sold off its holding immediately. Earlier known as Century Finance (now Cyberspace), the stock sank to its last-traded price of Rs 5.75 on April 18, 2001 (after adjusting for the stock split).

PM rules out Sinha's resignation over UTI fiasco

The Prime Minister Atal Bihari Vajpayee on Tuesday rejected the Opposition demand for the resignation of Finance Minister Yashwant Sinha over the UTI fiasco and said all steps were being taken to restore the confidence of small investors.

The government had come under attack in the wake of the UTI fiasco and party MPs sought to know what steps was being taken in this regard and the Opposition MPs gunned for Sinha saying he should resign owning moral responsibility for the UTI muddle. The demand was made both during Question Hour as well as during the inconclusive short-duration discussion on the issue and Sinha, in his response, denied having influenced the decision to freeze the scheme for six months.

The reaction of YASHWANT SINHA >> I deny it with all the emphasis at my command (that the finance ministry was in the know of the US 64 problems earlier)

Participating in the inconclusive short duration discussion in the Rajya Sabha, leader of the Opposition, Manmohan Singh, labeled the UTI fiasco as a "great betrayal" of over 20 million investors particularly pensioners, widows and the middle-class AND THOUGH heads had started to roll, the finance ministry had a lot to answer for its inability to read the signs of crises.

Participating in the discussion, Singh said Sinha's yet another disclaimer that his ministry was not aware of the looming crises did not hold water AND also regretted that though Finance Secretary Ajit Kumar had come to know about the freeze of UTI flagship scheme US-64, he was not informed for 36 hours adding that this was a grave lapse.

Supporting his Congress colleague, Kapil Sibal, charged that the government with "political expediency" for purchase of low-value shares at high prices by UTI in a bid to prop up the capital market to create the elusive feel good factor in the economy

WHO IS RESPONSIBLE AND WHEN JUSTICE WILL BE DONE is something THAT THE GOOD LORD UP ABOVE only knows, possibly the real truth will never be known and kept hidden or even destroyed, but the culprits should know that when they die and go up GOD will put them through a grueling session and make them undergo the fruits of the same trauma they caused in this birth to millions and the same will happen when they take birth again in this world and undergo the saga.

After all it is known that an unwritten rule of nature says that what they sow they reap and reap they shall a 100% correct some day in this birth itself or the next to come.