Search the Internet          Tips  Sites: Finance, Investment

UTI told to file reply on PIL over US-64

The Bombay high court on Wednesday directed Unit Trust of India to file by August 1 an affidavit in reply to a public interest litigation challenging its recent decision to suspend sale and repurchase of units under US-64 scheme.

The PIL, filed by National Association of Small Investors president Pradeep Bhavnani, came up for hearing before Chief Justice B P Singh and Justice Vijaya Kapse-Tahilramani.

The PIL prayed that the suspension of sale and repurchase of units under this scheme be lifted and UTI be directed to repurchase the units at the same price offered to investors.

The PIL also prayed for a direction to UTI to raise the dividend announced for US-64 scheme to atleast 20 per cent.

The PIL contended that the yield to the investors based on the present 10 per cent dividend was a mere 6.67 per cent, even below the prevailing the bank interest rate per annum.

NASI contended that there was no clause in the agreement or conditions for investment about temporary suspension of freeze of sale and repurchase of units under this scheme.

Therefore, UTI had no right to issue the impugned order.

It alleged that large corporate homes like reliance, petroleum giants such as BPCL, IPCL, IOC and multi-nationals were among the investors of US-64 scheme.

Prior to the abrupt suspension of sale and repurchase of units under this scheme, many companies had redeemed their investment.

Between March and April an estimated Rs 41.41 billion was redeemed of which corporate investment was to the tune of Rs 40 billion, the PIL said and demanded a Central Bureau of Investigation inquiry into the circumstances leading to UTI's impugned decision.

YOU MAY ALSO WANT TO READ:
The UTI Crisis

Tell us what you think of this report