B G Daga, managing director of Central Depository Services (India), has slapped a legal notice on the Unit Trust of India, State Bank of India, Bank of Baroda and Bank of India.

In a notice to the chairmen of the three banks -- which are among the sponsors of CDSL -- and UTI, Daga has called upon them to prove their various allegations against him and warned them of legal consequences. Daga served the notice through his lawyer Kookada & Associates on May 9.

Before joining CDSL, Daga was executive director (business development) at UTI.

UTI had suggested to the three sponsors of CDSL to convene an extraordinary general meeting to consider a resolution to remove Daga from his position for his alleged role in the Calcutta Stock Exchange payment crisis in February/March, 2001.

An internal UTI inquiry seemed to indicate that Daga had clear knowledge and understanding of the true purpose of certain impugned transactions.

Daga has demanded that if his continuing as managing director, CDSL, is viewed as a concern from the corporate governance angle, then several eminent people on the board of UTI should also be held culpable.

Further, he pointed out that the transaction involving the purchase of DSQ Software shares in March 2001 occurred at a time when he had ceased to be involved with the investment decisions of the Trust.

"Till today, no one has told me what exactly is the nature of my involvement in the said transaction. Except seeking my responses to pre-prepared questionnaires bought to me by a UTI vigilance officer in February 2002 -- without informing me the purpose -- I am not aware of any enquiry instituted against me," Daga said.

"No evidence, if any, against me has been made available to me for explanation/ clarification in spite of my detailed suo motto submission to JPC (Joint Parliamentary Committee) members, the chairman of UTI and each of the UTI Trustees in August 2002," he added.

According to Daga, if he were to be held responsible for an investment decision which, on hindsight, proved to be disastrous for the Trust, then, "all UTI Trustees who have served on the UTI board would also have to be subjected to such allegation as they cannot deny having the knowledge of various questionable transactions afflicting huge losses upon the UTI.. Because all these transactions were either approved, reported or ratified by the UTI board at some stage or the other and therefore, they could be presume to posses the knowledge and understanding of the true purpose of all such transactions".

After going through various enquiry reports and depositions before it, the JPC observed that former UTI chairman P S Subramanayam and late M M Kapur, then UTI executive director, had approved the transaction relating to the purchase of DSQ Software shares from the CSE on March 9, 2001.

The JPC also recommended that the CBI should expedite its enquiry into the formal complaint filed by UTI naming Subramanayam, Kapur and Daga in the matter.