Uti & #39;S Market Conduct To Come Under Cbi Probe

The Centre today moved to place aspects of the Unit Trust of India's (UTI) operations in the stock markets under a CBI probe, while the Joint Parliamentary Committee investigating the stock scam is almost certain to expand its investigations to cover much more of the trust's activities.

While finance ministry has already accepted that it will be forced to cope with the expanded role of JPC once it resumes its sittings in mid-July, sources said they will also ask for altering the mandate of the JPC to include all aspects of UTI 's role under it.

They said since the basic thrust of the JPC is to protect the small investors by examining the role of all entities that short circuited them, it is essential that the JPC goes back to parliament requesting for an expansion of its role. The issue is expected to dominate the meeting of the committee when it meets again.

At present the mandate of the JPC with regard to mutual fund is pretty limited. The chairman of the JPC had said earlier that it will investigate the role of UTI only in the context of its stock market operations, but the mutual fund behemoth's decision to freeze sale and purchase of Unit-64 and its consequent impact on small investors has now forced the issue.

Sources also said that that the government has decided to refer some of the investment decisions under the erstwhile chairman of UTI to CBI. However CBI has denied that there has been any communication from the government on the issue, "thus far".

But with Sinha keen to distance himself from the decision by UTI to freeze the sale and repurchase of US-64, the government is eager to ensure that it should be seen to have explored all avenues and not gone soft on issues that harm small investors, at a time when the stock market scam is still fresh in memory.