US-64 price crashes
Mumbai—US-64 prices slid by 65 p on Tuesday to touch an all-time low of Rs 8.50 per unit. This was after it touched a greater low of Rs 8.25 during intra-day trading.

About 82,700 US-64 units were transacted in 102 trades as against 44,627 units in 89 trades the previous day.

With the latest fall US-64 prices have declined by Rs 1.50 or 15 percent in the last six trading sessions.

This is after the new UTI chairman M Damodaran announced a bailout package on July 15 assuring a minimum repurchase price for a maximum of 3,000 units. The repurchase price has been set at Rs 10 in August when repurchases open, and increases by 10 p every month till May 2003.

The reason for the heavy sell-off was the arrest of UTI chairman PS Subramanyam and other officials for their alleged involvement in the investment of an unknown company Cyberspace.
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UTI has company in Cyberspace
Mumbai—Two other public sector mutual funds apart from UTI seem to have heavy exposure to Cyberspace. These are the Life Insurance Corporation of India’s MF and General Insurance Corporation MF. Cybersapce topped the list of holding of GIC’s mutual fund scheme, GIC Growth Plus II, accounting for 9.38 percent of holding at Rs 2.96 crore till January 2001. GIC’s scheme is probably the worst hit as it is a small scheme of about Rs 30 crore and Cyberspace accounted for about 10 percent of its portfolio. Since January 2001 GIC’s exposure has, unbelievably enough, gone up despite a dip in the price of Cyberspace share price. LIC was no less exposed to Cyberspace. A massive nine of LIC schemes seem to have exposure to Cyberspace. The stock was present in an assortment of income and equity funds with a cumulative investment of Rs 7.06 crore. Not only this, even private sector funds Reliance MF had bought into the stock but held on to it for a short period before it sold out.

What attracted all these companies to the almost unknown cyberspace, earlier known as Century Finance, was its stunning performance on the stock market. In March 2000 it hit an all-time high of Rs 1,374 but was quoting at a low of Rs 6.75 on April 18 2001. At present it is said to be worth only Re 1.
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UTI may go to government for bail out
Mumbai—The government again seems set to bail out UTI with the new UTI chief M Damodaran mapping out a four pronged plan to restore investor confidence in UTI.

The main thrust of the new plan is moving the government for infusion of funds at a later stage if share prices do not pick up; paring the total corpus of the Trust to a manageable size and setting up an asset management company to run the fund; splitting up the US-64 scheme in two or three schemes and hiring on fixed term contracts a few professional fund managers by paying market related salaries.

Further UTI is to come under the purview of the Securities and Exchange Board of India from January 2002.

Damodaran has also reinstalled AK Sridhar—who was transferred to a zonal office after he strongly recommended selling Cyberspace stock—at an important position in UTI.
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