Equity contagion hits the mutuals
No respite seems in sight for India's equity markets. Reeling from a share price rigging scam in March and brokers' protests against new trading rules, the markets were felled once again last month by news of trouble at India's largest manager of mutual fund assets, the Unit Trust of India (UTI).
On July 20, Pavagada Subramanyam, former chairman of the government-controlled UTI, which manages assets worth around $12.3 billion owned by 40 million investors, was arrested, along with two senior UTI officials, on charges of criminal conspiracy and abuse of public office. The trio are accused of privately buying shares in a software company last year, resulting in losses of about Rs320 million ($6.8 million).
Subramanyam was sacked by the government in early July, a day after UTI's biggest fund, the $2.7 billion open-ended US 64, froze sales and purchases of its units until January next year.