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'UTI chief exceeded authority in sanctioning Rs 19 bn'

Unit Trust of India ''exceeded its authority'' by sanctioning 76 additional transactions worth Rs 19.20 billion between July 1998 and June 2001 with certain investments having gone into default within a short period of their sanction.

P S Subramanyan, who was chairman of UTI during the period, was sacked after the board's decision to freeze its US-64 flagship scheme with an investment of Rs 600 billion sending shockwaves amongst its 2 million investors.

The Tarapore Committee set up to inquire into the activities of Unit Trust of India, the report of which was submitted to the government, said during the three year period ending June 2001 as many as 378 investments in debt instruments by way of private placement involving Rs 121.52 billion had taken place.

Of these, the executive committee of UTI sanctioned 103 such investments amounting to Rs 64.70 billion, with the chairman sanctioning the remaining proposals and in the process exceeding his authority.

The chairman, besides sanctioning all the initial public offerings during the period, also sanctioned over 75 per cent of private placements of equity and over 72 per cent of private placements in debt instruments, said the report, which was also presented to the Joint Parliamentary Committee probing the stock scam and freeze of UTIs flagship scheme.

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