As on October 14, the amount of fresh sales in US-64 during October had been Rs 60 crore. This follows a massive redemption spree during the first few days of the month amounting to about Rs 550 crore.

On the same day, all leading dailies carried chairman PS Subramanyam's statement explaining the situation and dismissing several misconceptions which had surfaced in the market.

According to trust officials, this statement seems to have had a positive impact as sales for the month jumped to Rs 120-140 crore and redemptions stayed more or less constant at Rs 650 crore.

Subramanyam in his statement had said that UTI will continue to distribute income (dividend) and follow time-tested sale and repurchase pricing policy which will be stronglygoverned by unitholders' interest.

Explaining the predicament of US-64, Subramanyam said, "There was a sharp and sudden fall in the stock price index by 21.5 per cent between May 5 and June 30 which has been attributed to several adverse external events. Consequently, there was a notional depreciation in the value of US-64 investments of the order of Rs 3,566 crore as on June 30, while there was no depreciation on May 5. The board of trustees, in concurrence with its auditors, decided that this depreciation be charged to the reserves account. As a result, the account showed a notional negative balance of Rs 1,098.49 crore".

UTI officials pointed out that the state of US-64 was indicative to that of the corporate scenario, considering that its portfolio comprised blue-chips, PSUs and top banks. "The fact the US-64 was down showed that the entire corporate sector was down as its performance is linked to the performance of the underlying portfolio," said a trust official.

"We had since the beginning beensaying that sales will pick up in the last part of the month as is the tradition. The trust is committed to increasing the repurchase price in November," said a source.

Meanwhile, finance secretary Vijay Kelkar met UTI trustees on Wednesday to apprise himself of the recent developments.

State Bank of India chairman MS Verma and IDBI chief GP Gupta were among those who attended the meeting. It is learnt that Kelkar was keen to hear from the trustees their perception of the recent developments and steps that they needed to be taken. Broader issues pertaining to the capital markets as a whole were also discussed, sources said.