Of indictment and absolution

T V Sriram in New Delhi

Even as the Enron and WorldComm accounting scam rocked the financial edifice of the developed world during the year, millions of small investors in the country got a fright from the wrongdoings that caused the http://www.rediff.com/money/bscrisis.htm target=_new>2001 stock market scam and the UTI muddle.

The fag end of the year finally saw the unveiling of the report of the Joint Parliamentary Committee appointed to go into the causes of the stock scam and the temporary freeze on UTI's flagship scheme US-64 that left small investors in a frenzy.

"Everybody will have to share the blame - stock exchanges, regulators Securities and Exchange Board of India, Reserve Bank of India and Department of Company Affairs, and the finance ministry," chairman of the JPC Prakash Mani Tripathi told reporters after tabling the report in Parliament.

The 452-page report, which encapsulated 360 hours of interrogation, made several recommendations for restoring investors' confidence and revitalisisng the capital market.

The muddle in the country's largest mutual fund has put paid to the hopes of investors who are still groping in the dark for safety in the capital market.

The bourses have been experiencing a roller-coaster ride ever since the stock market crashed soon after the announcement of the Budget for 2001-02 financial year.

Tripathi said had recommendations of the previous JPC pertaining to more powers to regulators in the liberalised regime been fully implemented the scam might have never occurred.

The report also caused its share of political rumblings with the opposition Congress demanding the resignation of External Affairs Minister Yashwant Sinha as he was the finance minister during the period of stock market scam and the UTI fiasco.

"The JPC report is a damning indictment of Sinha who presided over the stock market scam of 1999-2001 and the disaster which overtook the Unit Trust of India, particularly its US-64 scheme", party spokesman S Jaipal Reddy said while demanding his resignation.

Reddy said the party expected that Prime Minister Atal Bihari Vajpayee would take "appropriate redemptive action" for the "sins of ommissions and commissions" for which JPC has held the Union government responsible, including the investigative agencies under Prime Minister's charge and the Department of Company Affairs.

Demanding Sinha's head, senior Congress MPs Mani Shanker Aiyar and Kapil Sibal, who were members of the JPC on stock market scam, said the then Finance Minister Manmohan Singh had submitted his resignation soon after the 1992-93 JPC report, even before the Opposition could make such a demand.

To repeated questions as to how Sinha, as finance minister, could be absolved of the responsibility, particularly when Finance Ministry was being held responsible, Tripathi said:"Read the report. I am not giving any opinion...Ask those demanding the resignation if they had not agreed with the report."

"It (report) was the view of every member... Ask them (Sibal and Aiyer) if they are contradicting," he said asserting that the report was unanimous unlike the previous two JPC reports.

---PTI

2002: The Year That Was