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Former UTI chief, 2 EDs remanded

Our Bureau

MUMBAI, July 21

A SPECIAL Judge for the Central Bureau of Investigation (CBI) today remanded the former UTI chairman, Mr P.S. Subramanyam, two Executive Directors, Mr M.M. Kapur and Mr S.K. Basu, and a stockbroker, Mr Rakesh G. Mehta, to CBI custody till July 27.

The three accused were arrested in the afternoon and produced in the Special Court in the evening. Ms Prema Madhu Prasad, General Manager, UTI, a co-accused in the case, however, was not arrested. All the accused were subjected to prolonged questioning b efore the arrest, CBI officials said.

During interrogation, Mr Subramanyam is said to have told the CBI that the decision not to subscribe to the shares of Cyberspace Infosys, as recommended by UTI's Equity Research Cell, was reversed upon the recommendation of Mr Kapur and Mr Basu.

The two Executive Directors, however, told the CBI that they were asked by Mr Subramanyam himself to ``revive'' the file and put it up to him.

The CBI also said in its first information report that Mr Arvind Johari, promoter of Cyberspace, had brought ``undue and extraneous influence'' on the institution to subscribe to the company's shares.

Meanwhile, the CBI is likely to widen the probe into the functioning of the US-64 scheme during Mr Subramanyam's tenure.

The investigating agency told the court that the three accused have to be interrogated in custody as they had not revealed the truth and were trying to blame each other. They could not give any plausible explanation about the sudden reversal of their dec ision on Cyberspace within a period of four to five days.

``It is observed on their examination that they are trying to conceal the truth,'' the CBI said in its remand application.

Mr Subramanyam told the court in his bail plea that the decision to subscribe to Cyberspace shares was purely a business one. He said he had taken several decisions in his career spanning 37 years and also during the past one-and-half years. None of the decisions were problematic.

He said he had told the CBI the reasons for reversing the decision on Cyberspace.

The CBI said the Anti-Corruption Bureau of its Lucknow branch had ``confirmed'' during its questioning of Mr Johari that Mr Rakesh Mehta was paid Rs 50 lakh by Cyberspace to ``prevail upon'' UTI to subscribe to its shares.

He also received Rs 1.18 crore from the company through a circuitous route for possible rigging the Cyberspace counter, the agency said.

The Special Judge rejected the bail plea of all the accused saying that it was too premature to consider it and remanded them to custody.

Picture: Mr P.S. Subramanyam. former UTI chairman, at the CBI Special Court in Mumbai on Saturday.

Picture by Paul Noronha