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Congress seeks to censure FM Sinha

India's main opposition party, Congress, said on Wednesday that it wanted a censure of Finance Minister Yashwant Sinha, accusing him of misleading the Parliament over a crisis at a state-run mutual fund.

Unit Trust of India, which manages assets worth Rs 575 billion, shocked millions of investors and rattled financial markets last month when it froze its flagship US-64 scheme after a sudden surge in redemptions.

The issue caused an uproar in parliament, where Sinha said neither he nor his ministry had been consulted over the decision to stop US-64 redemptions.

Congress spokesman Jaipal Reddy told Reuters Sinha had misled parliament by saying he was kept in the dark on the US-64 freeze.

The Congress party says Sinha knew about the freeze decision.

"The motion was moved (in the upper house) on Tuesday, it is under consideration," Reddy said.

The chairman of the upper house, Krishan Kant, will decide on whether to admit the motion but no time limit has been set.

Earlier this month, India's federal coalition defeated an opposition-sponsored motion in parliament to censure the government for UTI's deep losses.

The move came after Prime Minister Atal Bihari Vajpayee's coalition was plunged into crisis when he threatened to quit over comments by a coalition lawmaker who had linked the crisis in UTI to his senior aides.

He was persuaded to stay on by coalition partners, as UTI resumed payments to investors.

Ex-UTI chairman P S Subramanyam resigned after the freeze but was later arrested on charges of causing wrongful loss of Rs 328 million to the fund with an investment in software company Cyberspace Ltd. He has been released on bail.

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