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| The Securities and Exchange Board of India has decided to reopen 89 investment decisions by the erstwhile Unit Trust of India and appoint nearly 70 auditors to scrutinise the cases.
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| The appointments follow a decision made by Finance Minister Jaswant Singh, who wanted the cases to be referred to the capital markets regulator. As an input to the joint parliamentary committee investigating the 2001 stock scam, Sebi had looked at price movement in these companies.
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| Official sources told Business Standard that the market regulator was in the process of notifying the appointments. They did not indicate a schedule within which the audit firms would complete their work.
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| The SS Tarapore committee, appointed by former Finance Minister Yashwant Sinha two years ago, had scrutinised 19 investment decisions made by UTI over a decade leading up to the fiasco at the mutual fund in 2001.
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| Its examination had revealed that the decisions in 18 of the 19 cases were imprudent and actually turned out to be wrong. The companies examined by the committee included Reliance Industries, Satyam Computer, DSQ Software, Zee Telefilms and Essar Steel.
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| The committee also said cases where audits had already been undertaken should be referred to a pre-investigative body. For others, it recommended undertaking of audits, which could be later referred to the pre-investigative body, if needed. Where decisions were found to be influenced by reasons other than commercial interests, action should be initiated as per the Prevention of Corruption Act, 1988, it said.
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| The finance ministry subsequently referred these cases to the Advisory Board for Banking and Commercial Frauds, a unit under the Central Vigilance Commission. The commission, which looked into the matter, said some of the companies in which audit work had been completed could be referred to the Central Bureau of Investigation.
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| But, based on the recommendations of the joint parliamentary committee, the finance ministry decided to refer these 19 investment decisions, along with 70 others, to the markets regulator.
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The case file
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| July 2001: UTI skips dividend of US-64, freezes sale and repurchase
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| July 2001: Three-member committee set up under SS Tarapore to probe UTI activities, including alleged insider trading in its flagship scheme
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| Nov 2001: Tarapore committee says 18 of the 19 decisions imprudent, recommends further probe
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| July 2003: Finance ministry refers 19 cases to CVC, asks Sebi to look into 89 others |
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