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JPC to probe fund erosion in UTI schemes

Jayanta Mallick

KOLKATA, July 5

THE Joint Parliamentary Committee probing the stock market scam, will investigate funds erosion in UTI's schemes, including US-64, individually, and none of the schemes would be able to enjoy any kind of ``insulation.'' At present, UTI schemes are outsid e the purview of the Securities and Exchange Board of India (SEBI).

According to JPC sources, the panel will attempt to find out if there was any link between price rigging in the so-called Ketan Parekh stocks and UTI's investment deals in them in the corresponding period.

Sources further say that investments in both equity and schemes will attract JPC's attention. Ill-timed exits and entries into certain counters are being considered as the reason for erosion of funds.

Sources maintain UTI and other MFs investment deals fall well within the purview of JPC. ``Thus, extension of scope by the Union Government is not required,'' a panel source observed. JPC is not only concerned about US-64 investors but also investors in other UTI and MF schemes.

JPC has taken note of the fact that the NAV for US-64 has come down below Rs 6, even though UTI has indicated a slightly higher NAV of around Rs 7.50 to the Union Finance Ministry. Market sources feel that the US-64 redemption may be benchmarked at Rs 10 . Incidentally, it today closed at Rs 10 on the NSE.

Meanwhile, JPC, which will begin its three-day ``study tour,'' the first after formation, of systemic status of CSE, BSE and NSE in Kolkata and Mumbai from July 10, will also meet officials of SEBI and RBI. ``On many issues, it is being discovered that t he regulatory mechanism of SEBI and RBI had failed,'' a JPC source said.

In a bid to look for individual culpability in the stocks scam, JPC has already shot off 1,500 questions posed by its 30 members to different agencies including the CBI and the Enforcement Directorate, sources said.