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What is unreliable?
It is sheer brazenness to persist in the falsity of the news
report (July 12) that the alleged demand for the finance minister’s
exit is with reference to the US-64 scandal. Let the correspondent
declare the date, if not July 2 2001, on which the meeting between
the prime minister and the Rashtreeya Swayamsewak Sangh (RSS)
Sarsanghchalak took place so as to refer to the US-64 scandal
and demand the finance minister’s replacement. It is amusing
to call the source of the concocted canard reliable. If such
a source is reliable, what is unreliable?
-- M G Vaidya, RSS Spokesperson, New Delhi
Calm the investor
The sorry state of Unit Trust of India’s premier scheme US-64
has badly shaken the confidence of mutual fund investors in
general. The abrupt suspension of sale and repurchase of the
units and the subsequent decision to restore restricted redemption
from August 1, 2001 at a substantially reduced price have disillusioned
and disappointed the investors of US-64.
As recently as May 31, 2001 the sale price quoted by UTI for
US-64 units was Rs 14.55. As per the standard norm, the repurchase
price would be only slightly lower than the sale price. Therefore,
UTI’s decision on July 16, 2001 to allow redemption of up to
three thousand units per investor at Rs 10 per unit (with the
provision of a monthly increase by ten paise upto May, 2003)
or at net asset value (NAV), whichever is higher, from August
1, 2001 and the balance units at NAV from January, 2002 is not
in keeping with the principle of natural justice. If the present
crisis is indeed the outcome of alleged irregularities within
UTI, the investors cannot be penalised for that.
The least that UTI can do now to mollify the investors is to
allow unrestricted redemption of pre-June 2001 units at the
stipulated, though inadequate, price of Rs 10 per unit or NAV,
whichever is higher. The provision of monthly increase in the
price till May, 2003 will hopefully, prevent panic redemption
by investors.
Going by the rates of dividend distributed from 1997 onwards,
the performance of US-64 seems to have been progressively declining
for the past five years. There has obviously been no serious
attempt by the UTI management to counter this downslide. Yet,
the covering letter sent out with the dividend warrants made
pompous statements year after year to coax and cajole the unwary
investors.
In order to ensure that the scheme regains its lost charm and
attracts sufficient fresh investment, the NAV of units must
be reasonably high and must rise steadily. The current subdued
stock market conditions notwithstanding, it should be possible,
if corrective measures are implemented, for a powerful institution
like UTI to not only weather the storm but also to deliver the
goods in the not-too-distant future.
-- T Narayanan, Payyanur (Kerala)
Aspiring politicos
It is surprising to note that a great deal of political capital
is being made out of the murder of Phoolan Devi. It is also
a tragedy of today’s political life that a person who confesses
to be guilty of a crime loudly proclaims that his own crime
of homicide is a stepping stone to a political career. It is
time that electoral reforms are given top priority not only
to restore the confidence of the public in the qualities of
political leaders but also to have a morally sound political
system.
-- R N Lakhotia, New Delhi |
