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Market fall impact on UTI not clear: Sinha

Finance Minister Yashwant Sinha said on Friday that the recent crash in domestic stock prices had 'eroded' the net worth of investments of the state-run Unit Trust of India, the country's largest mutual fund.

But he said the impact of the market fall on the unit trust's net asset value would only be known at the close of its accounting year on June 30.

"Markets fall and rise. We can only say for sure that UTI has lost or gained money at the end of its current accounting year which is June 30," he said.

Domestic stock markets plunged sharply in March immediately after the presentation of a market-friendly Budget amid reports of price rigging and insider trading but have since recovered somewhat.

Sinha also told Parliament that UTI had invested in the so-called K-10 index, the nickname for the group of shares favoured by Bombay broker Ketan Parekh.

Parekh, known as the Bombay Bull, was taken into custody last month on suspicion of defrauding the state-run Bank of India of Rs 1.37 billion ($29 million).

No charges against him have been laid.

Opposition lawmakers renewed on Friday demands for a parliamentary probe into the share price crash.

Sinha said Parliamentary Affairs Minister Pramod Mahajan had already given the government's approval for a probe but a decision to hold the enquiry would have to be taken by the lower house.

A report by the market watchdog, the Securities and Exchange Board of India, blamed short sellers for helping to trigger the share price crash, according to newspapers.

The report was submitted to Sinha last Sunday but the contents have not been fully disclosed.

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