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JPC on stocks scam urged to probe UTI's investment

Rashmi Das

In a letter to the chairman of the joint parliamentary committee probing the stock market scam, Jagdish Shettigar, member, Prime Minister's Economic Advisory Council, has requested the panel to call for full and final details of investments or private placements made by United Trust of India.

In the letter addressed to Prakash Mani Tripathi, chairman, JPC, Shettigar has urged the committee to inquire about the criteria of investment made in shares and the details of profits and losses of all those transactions.

"Based on the details, the propriety of the transactions entered into by UTI and the nexus with corporates and stock market players can easily be determined," the letter states.

Shettigar has hinted in his letter that "UTI has deliberately purchased shares at artificially high prices in connivance with stock market operators and corporates and subsequently, those share prices have collapsed causing huge losses to millions of investors who have invested their life savings in the mutual fund."

The investments made by UTI, which Shettigar has called upon the JPC to investigate, includes Zee Telefilms, HFCL, DSQ Software, Global e-commerce Systems, Adani Exports, Padmini Polymers, Shonkh Technologies, Aftek, Infosys, Cyberspace Infosys, Sonata Software, Information Technologies India Limited of Usha group, Crest Communications, Malavika Spinning, Global Trust Bank, Barron's International and ETC Networks.

Shettigar has said in the letter that funds have been obtained by corporates from banks and financial institutions and then diverted to market operators like Ketan Parekh.

Further, Shettigar has requested the JPC to inquire from the Reserve Bank of India the scrip-wise particulars of all the sales and purchases made by overseas corporate bodies during the period January 1, 1999 to April 30, 2001.

Shettigar has stated in his letter that the role of OCBs needs to be investigated "since OCBs enjoy capital account convertibility and have remitted millions of rupees as stock market prices through manipulation."

The letter also adds that there is also a possibility of OCBs being controlled by resident Indians, who have used this route to transfer their unaccounted wealth abroad and must be probed to demonstrate the efficiency of RBI controls on foreign exchange.

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