In tune with prime minister's resolve to punish the fly-by-night corporates that vanished after mopping up huge funds from the markets, Ficci said it would not defend companies which "deliberately cheated" small investors,``We will not hold brief for any one who has deliberately cheated or indulged in fraudulent activities thereby failing to fulfil their commitments to the investors,'' said the new Ficci president Sudhir Jalan.

He admitted the failure of a large number of corporates, who had raised money from the primary market during the boom phase of 1993-94, in giving adequate returns to the investors were responsible for the present slump in capital market.

Prime minister Atal Bihari Vajpayee had castigated a section of Indian industry for its"unscrupulous" approach towards investors and unwillingness to maintain transparency in their dealings at Ficci's 71st annual session yesterday.

Jalan, who took over as president of the oldest apex business body today, however, said that many genuine companies also faltered as they had not anticipated the slide in industrial and export growth that set in two years back.

Referring to Unit Trust of India's (UTI) beleaguered US-64 scheme which has come under tremendous redemption pressure recently, he said the fundamentals of the largest mutual fund scheme are strong. ``It is better for UTI to tell the whole truth at this point of time even if it is a hard one. Sky will not fall if the fund decides to maintain transparency,'' Jalan said.

The whole financial structure in India will be endangered if UTI falls apart and government should unequivocally declare its support to save such a situation, he said.

Asked why the chamber backed an "individual case" like UTI but chose to remain silent on thegovernment's undue delay in clearing the Tata airlines proposal, he said ``there is no reason to stop the Tata proposal''.A clear and transparent guideline should be laid out for foreign direct investment (FDI) and that would go a long way in shaping up investors sentiment, Jalan said.

He, however, said many Indian companies are finding it difficult to take on multinational corporations who have huge resources at their disposal.

Further, the domestic companies are saddles with a host of problems like archaic labour laws that prevents firms from shedding their excess work force, he said.

The union government should initiate a series of measures including apportioning a part of provident fund for investing in equities to pep up the capital market once again, he said.

``Now is the time to take the bull by the horn. If the Sensex is brought back to around 3800 points it will do a lot of good to the economy,'' Jalan said.