Only units, no trust

Sir,- The sinking flagship of UTI, US 64, is sending shock waves down the spines of middle class investors. This situation could have been averted had the UTI in its wisdom kept away the corporates from investing in US 64. Cash rich corporates found in US-64 the best place to park their huge funds and reaped high returns even on a low spread. As bonus, they redeemed their units in April at the best price and left the sinking ship safely, trapping the middle class investors. Now UTI is trying to pass the loss to them in the guise of NAV based price! This should be curbed forthwith.

The authorities can consider the following damage control exercises: Recall the investments by corporates if probe proves that the corporates benefited by insider information to unload their investments at the best price in April to avoid NAV based price which would be certainly below par (below Rs. 10). All investors should be redeemed at the price purchased by them and not at the below par value on account of switch over to NAV based price. The Government consider issue of 10 to 11 per cent tax free bonds in lieu of redemption to overcome liquidity crunch or investments in US 64 could be treated as tax credits to be adjusted in future tax liability of the assessee investors. Others can be paid as in cash or bonds.

Chitra Raman,

Chennai

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