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P S Subramanyam, 3 others granted bail

Priya Ganapati in Bombay

Special Judge S R Mehra on Tuesday granted bail to P S Subramanyam, the former chairman of Unit Trust of India, two other fund officials and a stockbroker, all accused of financial wrongdoing by the CBI.

Former UTI chairman P S Subramanyam and UTI executive directors M M Kapoor and S K Basu and stockbroker Rakesh Mehta were arrested by the Central Bureau of Investigation on July 21, along with stockbroker Rakesh Mehta and were charged with causing a wrongful loss of Rs 320.8 million to UTI over investments in software company Cyberspace Infosys Ltd.

However, Cyberspace director Arvind Johari was not granted bail and he was remanded to judicial custody till August 14 by the judge.

Subramanyam, Basu and Kapoor were granted a bail of Rs 150,000 and a surety of like amount, while stockboker Mehta was given bail at Rs 300,000 and a surety of like amount.

The judge in his order said that "the state has unearthed all incriminating documents against the accused. The responsible task of recording the statements of more witnesses can be done without keeping the accused in custody any further. Considering the above, the bail plea of the accused could be favourably accepted".

However, the court said that Arvind Johari was the main beneficiary of this UTI scandal and as such he should be remanded to judicial custody till August 14. Johari's lawyer, Mahesh Jethmalani, also did not argue for bail for his client saying that granting bail to Johari would have made no difference as he was already in judicial custody in Lucknow.

Special Judge S R Mehra also passed strictures against jail authorities who did not produce the accused in the court at the scheduled hour. The judge lambasted the authorities and warned against any delay or default in producing the accused in his court saying that strict action would be taken is this recurs.

Earlier on Friday, the CBI in its remand application before the court had stated that during the custodial interrogation of the accused it was revealed that the investment decisions by the UTI in various other cases may have been taken for reasons other than for commercial considerations or business expediency.

The CBI said that Subramanyam has to be confronted with the call details of his mobile phone which he had subscribed to in a different name.

The agency also said that he also has to be confronted with some other vital documents received from the UTI chairman's secretariat on August 2.

The CBI believes that these documents contain vital incriminating information and might allude to a conspiracy regarding the buying of shares of Cyberspace Infosys by the UTI.

UTI manages Rs 575 billion in assets, about two-thirds of the total assets of the Indian mutual fund industry. It has about 41 million investors in its 87 schemes.

A stock market slump caused huge losses for the fund which was heavily exposed to equities.

The cash-strapped fund froze redemptions in its flagship US-64 scheme on July 2, which drew protests from investors and caused an uproar in Parliament.

UTI was forced to re-open the window for small investors, and has started accepting redemption requests for up to 3,000 units per investor from August 1. However, not too many investors have been queuing up to sell.

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