Ask Uti To Repurchase Units At Rs 14 Each, Fm Urged

The Consumer Education and Research Centre (CERC) today urged Union Finance Minister Yashwant Sinha to see that the Unit Trust of India repurchases units at the pre-freeze price of Rs 14 each.

In a memorandum to Sinha, CERC said the limit of repurchase by UTI be increased from 3,000 to 10,000 units.

The CERC plea to Sinha was the second such request since the freeze was announced on July 2, 2001.

In the earlier memorandum, the organisation, which works for the rights of consumers and small investors, had called upon the finance minister to immediately unfreeze US-64, UTI's flagship scheme and allow small investors with units up to Rs 100,000 to exit from it.

CERC said that small holders, who were the loyal UTI investors, should not be penalised for no fault of theirs.

And, since the big or affluent holders of a large number of units had already taken advantage of higher repurchase prices and exited, the smaller holders of units up to Rs 100,000 should be redeemed at the price prevalent prior to the crisis.

It had also demanded that the functioning of UTI be made "transparent and accountable" and that details about the investment of unit-holders' fund be announced quarterly or half-yearly.

CERC said the demand for raising the units to be repurchased by UTI was based on the fact that deposits with the nationalised and co-operative banks were insured and that in any contingency, like a co-operative bank going bankrupt, at least Rs 100,000 were paid to the depositors.