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Government to institute enquiry into UTI dealings, insider trading

The government would soon institute an independent enquiry into the activities of UTI leading to the freeze of its scheme US-64, Finance Minister, Yashwant Sinha, said on Monday.

The proposed enquiry would be apart from the Joint Parliamentary Committee probe into the stock scam, Sinha told reporters and added that it would look into the issue of insider trading in US-64 and commercial judgement of UTI.

Asked if the probe would be by CBI, Sinha said it was yet to be finalised and the decision would be announced soon.

"We will order a more comprehensive inquiry into the redemption and investment decisions of UTI in the past, which will be conducted by an independent body."

The FM further said that the finance ministry was not taken into confidence on the freeze on redemptions in the country's largest fund.

"I'm telling you with full sense of responsibility that the Ministry of Finance was not taken into confidence about the freeze of sale and repurchase of US-64. Vital facts were not shared with the ministry either by the board or the chairman of UTI," Sinha said..

Last week, state-run Unit Trust of India, the country's largest mutual fund manager, froze redemptions in US-64 fund units after a huge jump in withdrawals in April and May. US-64 is its flagship scheme, with about 20 million unit holders and accounts for more than a fifth of UTI's total assets.

"We are working towards a solution. We would be able to find a solution to the freeze by the end of this week," Sinha said.

With added inputs from Reuters

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