SRI LANKA-Peace Still Far Away

January this year. The UTI's claim that the matter had been under its active consideration all along does not carry conviction. And, interestingly, the company which had been dragging its feet for so long, suddenly replaced the whole lot of 8.70 lakh shares once the special court froze transfers in the 15 lakh RIL shares and it became known that the UTI holdings were part of them. The UTI's massive bulk purchase of the RIL shares on private placement has now been revealed to be worth Rs 1,080 crore, on which the UTI has lost Rs 400 crore so far. What had been known so far was the purchase of a block of over 20 lakh shares under the private placement at a price of Rs 385, Rs 7 higher than the market price, involving an investment of Rs 773 crore, on which there had been an erosion of Rs 290 crore in value. It has been now revealed that this had been the second private placement, the first one having been that of 16 per cent non- convertible debentures (NCDs) with warrants attached. The warrants, numbering nearly 75 lakh, were compulsorily exercisable at a price of Rs 401 per share between October 1994 and March 1995; the UTI exercised the warrants on March 10, 1995. With a market price of Rs 240, the erosion in investment amounted to another Rs 125 crore. Was this a simple case of failure of commercial judgment?