It had been a week since Subramanyam took the finance minister head on with his lawyer Satish Manshinde alleging that the Finance Minister Yeshwant Sinha had influenced UTI's investment in the controversial Rs 32.8-crore Cyberspace private placement deal. The lawyer had said that the FM had asked UTI to invest in projects in UP and Bihar belt, particularly as it was a backward belt. Also, the UP government was a partner in the Cyberspace project, all of which weighed heavily on UTI's investment decision. A charge that has been denied by the finance minister vehemently.

Even though the finance minister as well as the ministry of finance (MoF) have time and again insisted that the MoF does not have a nominee on the UTI board since May 1997 nor does it have any powers directly under the UTI Act and is not party to any UTI's board decisions, Subramanyam's statement opened a Pandora's box.

A look at the statement of calls received and made from Subramanyam's cell phone reveals that he was in touch with the MoF as well PMO. It was on June 28, 2000, that Cyberspace made a proposal to UTI to participate in its private placement offer, however, UTI's equity research cell did recommend against subscription. On July 17, Subramanyam and the two EDs decide not to invest in Cyberspace, only to reverse the decision four days later on July 21, 2000, when UTI picked up 3.45 lakh shares of Cyberspace at Rs 930 per share.

While overruling research analysis is not something that to frown upon, the question arises if Subramanyam was acting at instructions from someone in Delhi? According to the statement of calls, Subramanyam was in touch with the then secretary in PMO, N.K. Singh, the day before US 64 subscribed to Cyberspace. On July 20, 2000, both parties talked to each other thrice. Did the conversation have something to do with Cyberspace investment?

In the debate that followed in the Rajya Sabha, the finance minister cleverly deflated the issue by going into the history of US 64 and the scheme's investment of Rs 1,073 crore in Reliance Industries in 1994---Rs 300 crore through debentures with warrants and another Rs 773 crore through direct investment---with a five-year lock-in. Interestingly, in a letter written to the finance minister on July 27,2001, Reliance Industries has mentioned that UTI's investments in RIL shares have generated huge profits for UTI rather than causing any losses. The letter states: "Based even on current depressed market prices, UTI has made a profit of Rs 862 crore on its investment."

Temporary diversions from the Cyberspace investments and FM's role in UTI's investment decisions are fine. But Mr FM, what about the numerous calls made by the finance secretary as well as the PMO, as per the Subramanyam's statement of calls? Perhaps the white paper that the judge has asked CBI to come out with covering all angles of Cyberspace deal will throw some light on the issue. Or, perhaps it will just open up another can of worms.