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JPC may probe mutual funds' role in scam

Mutual funds such as Unit Trust of India and Morgan Stanley can be examined by the Joint Parliamentary Committee probing the stock market scam to determine their scam-related activities even though mutual funds are not specifically mentioned as part of the terms of reference of the JPC, its chairman, Prakash Mani Tripathi, said in New Delhi on Thursday.

''Though mutual funds, in general, are not part of the terms of reference of the JPC, however, buying or other functions of any of such companies like Unit Trust of India or Morgan Stanley that impact stock exchange (during the scam period) can be inquired into,'' Tripathi told reporters at the end of the fourth-day of the technical briefing.

He said the JPC would not be going to the general functions of the mutual funds but any activity that it felt is connected with stock exchanges before or during scam period could be looked into.

Tripathi also said the market regulator Securities and Exchanges Board of India told the JPC that it did not have enough powers to regulate.

The JPC would continue its technical briefing on May 29 and 30 before moving onto the second stage of discussions from the second week of June to decide on those who need to be called for examination.

Giving details on Thursday's technical briefing, Tripathi said Sebi led by its chairman D R Mehta gave an insight into the role and functions of the regulations and provisions of Companies Act.

This, he said, was followed by a briefing by the National Stock Exchange managing director designate, Ravi Narayanan.

It was told at the JPC that the NSE was set up to enable people from far-flung areas to access the stock exchange.

The Bombay Stock Exchange officials also explained in detail the functions of the bourse, he said.

To a query on whether the JPC would not get outdated due to the new developments such as measures taken for preventing price rigging and market manipulations, Tripathi said the earlier JPC set up in 1994 had taken stringent action against many officers and others.

He said the present JPC would primarily look into those guilty and would suggest punishment.

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