I Was Kept In Dark About UTI Crisis, Sinha Tells JPC

New Delhi, November 26: | Updated: Nov 27 2002, 05:30am hrs
Former finance minister and presently external affairs minister Yashwant Sinha told the Joint Parliamentary Committee (JPC) probing the multi-crore securities scam that he and his officials were kept in dark about the happenings in the Unit Trust of India (UTI) till the last moment.

Mr Sinha, who appeared before the JPC on Tuesday, said that he was informed of the redemption problem in the UTI only a couple of hours before the UTI board decided to freeze its flagship scheme US-64.

Besides Mr Sinha, who was finance minister at the time of the stock scam, former finance minister Manmohan Singh also briefed the JPC on the functioning of UTI, Reserve Bank of India (RBI) and Securities and Exchange Board of India (Sebi) during his five-year tenure (1991-96).

With Tuesdays depositions, the JPC has completed the process of examining various officials, individuals and regulators in connection with the scam, JPC chairman SPM Tripathi told reporters.

The committee would endeavour to submit its report before the end of the ongoing winter session of Parliament when the extended term of the JPC would expire, Mr Tripathi said.

Mr Sinha also maintained that a UTI letter, received at the finance ministry on June 30, 2001, which mentioned about the trusts problem, was brought to his notice only on July 2 due to the intervening week-end.

Another UTI letter, sent to the ministry a month earlier, had not given any indication about the redemption problem, he said.

Asked why he did not take any pro-active action, Mr Sinha said since there was no indication that a crisis was round the corner, he had no reason to suspect a redemption problem.

The former finance minister also told the JPC that the role of the government in the functioning of bodies such as Sebi, RBI and UTI was a matter of discussion. These bodies had statutory powers and the government did not interfere in their day-to-day functioning. However, the government was answerable to Parliament for any lapses on their part.

Mr Sinha and Mr Singh also said the government should not review the double taxation avoidance treaty with Mauritius as India had special relations with that country and similar treaties existed with other nations.

About his statement in the Rajya Sabha that there was no payment problem at the Calcutta Stock Exchange, Mr Sinha said a few days later the problem did arise but it was tackled using the resources within the exchange.