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Opposition demands Sinha's resignation

Our Bureau

NEW DELHI, July 24

THE BJP-led Government is under pressure from the principal Opposition parties, especially the Congress (I), to accept responsibility for the mismanagement of the Unit Trust of India and to remove Mr Yashwant Sinha from the Finance Minister's post.

Besides the Congress (I) and the CPI(M), the Finance Minister also came under attack from other Opposition parties, which have also been united on this issue of seeking accountability for the US-64 fiasco. None of these political parties is willing to ac cept the Finance Minister's statement that the Government was unaware of the problems the scheme was facing earlier and also that his stand that the Government had not influenced the UTI board's decision to freeze the sales and repurchase of units of US- 64 for six months.

The Congress party leader, Dr Manmohan Singh, led the attack on the Government and sought the resignation of the Finance Minister for the fiasco. Accountability has also to be fixed in the Finance Ministry, he said.

However, there was support for Mr Sinha from the Prime Minister, Mr Atal Bihari Vajpayee, who said at a BJP Parliamentary Party meeting that there was no need for the Finance Minister to quit. Mr Sinha is scheduled to reply to the discussion in the Rajya Sabha on Wednesday.

After the Opposition forced the issue in the Rajya Sabha, where it enjoys a majority, the Government had to accede to a short duration discussion on the US-64 issue. Several members from various political parties who spoke today, sought the scalp of Mr S inha, who they said failed to protect the interests of millions of unit holders.

The Opposition today raised several decisions on the UTI issue. These included reversal by the UTI Chairman of an earlier recommendation, not to invest in Cyberspace Infosys, a company jointly promoted by a UP Government agency, directions given to UTI t o invest in certain private corporates, the issue of redemptions by major corporates, the private placement of non-convertible debentures (NCDs) by UTI with private corporates having sub-investment grade rating, and the high equity exposure of over 65 pe r cent in US-64, despite a recommendation by the Deepak Parekh Committee to increase the debt component.

According to Mr Amar Singh of the Samajwadi Party, the arrest of the UTI Chairman, Mr P.S. Subramanyam, was an eyewash. The needle of suspicion in the Cyberspace Infosys case pointed to people occupying top positions in the Government, he said.

Earlier, Mr Sinha said that although the Finance Secretary had received a letter from UTI on June 30 about a proposal to freeze sales and repurchase of units of US-64, the ministry could not take immediate action as the balance sheet of UTI had to be app roved by the board of trustees. Further, any intervention by the Government would have severely affected the interests of the country's largest mutual fund and its two crore investors.