Govt vows to book UTI culprits soon

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  • Published 18.02.03

New Delhi, Feb. 18: Finance minister Jaswant Singh today said the government will soon book officials involved in the Unit Trust of India scam and that it will redeem all US-64 units worth Rs 6,000 crore.

The finance minister told the Rajya Sabha that there will be a new chief to head UTI-II which has been cleaved out of the erstwhile Unit Trust of India.

“Action will be taken against the officials found guilty of misconduct by the joint parliamentary committee (JPC). No one will be spared,” Singh said.

In December 2002, the JPC probing the financial transactions of fund management firm Unit Trust of India had indicted top UTI executives, finance ministry and financial institution Industrial Development Bank of India.

“The matter has been referred to a committee to decide what action should be taken against the guilty officials,” Singh said.

UTI-II, renamed as UTI Mutual Fund, has an asset base of Rs 15,000 crore from 43 net asset value (NAV) schemes. The fund is run by an asset management company (AMC) floated by the State Bank of India along with Life Insurance Corporation, Bank of Baroda and Punjab National Bank with capital infusion of Rs 2.5 crore each.

“We will find the best possible talent to head UTI-II although the current chief M Damodaran has done his work well,” Singh said.

“UTI-II will be a market-related mutual fund and it won’t be privatised,” he added.

In July 2001, the fund ran into difficulties after a cash shortfall saw it unable to meet redemption pressures that led to a freeze on sales and repurchase on units issued by the flagship fund US-64.