Meanwhile, sources in the Securities and Exchange Board of India (Sebi) said that the fund has assured the market regulator that redemptions would be made subject to the court order. The fund notified, in keeping with the regulations of Sebi, the decision of its board of trustees to convert the scheme (due for redemption today) into an open-ended scheme with effect from July 1.

``No prior permission is required for conversion into an open-end scheme and we have made our stand clear on the basis of the offer document that Cantriple is not an assured return scheme,'' said Canbank MFmanaging director K V Hegde. However, a public announcement made by the fund in leading newspapers states, ``Unitholders, not in favour of the proposed conversion, and opt for redemption of their holdings, redemption of units will be offered, in full or in part, at NAV linked price to be announced on June 30.'' There is no mention of its assurance to the regulator.

The objective of the scheme launched in November 1991with a corpus of Rs. 507 crore, was +to cumulate the capital fund in such a way that at the end of the 90th month from the date of allotment, the cantriple holders shall get an amount equivalent to three Times their investment or more, which works out to a return of more than 14.9 per cent. The scheme had a capital of Rs 285.65 crore as of March 31, 1998, and an assured return of 200 per cent would imply that the fund coughs up roughly Rs 857 crore. The market value of the investments, as against this, works out to only Rs 457 crore. In July 1997, Canara Bank was forced to bail out the fund tothe extent of Rs 1,048 crore, when it was unable to meet the assured return in the canstar scheme. Following this, the government had to recapitalise the bank by issuing bonds worth Rs 600 crore.