Alliance Capital Asset Management (India) Ltd would conduct an internal enquiry into the alleged insider trading and non-disclosure of investments by its fund manager Samir Arora, who has been barred by the Securities and Exchange Board of India from dealing in securities pending investigations.
"Alliance Capital follows the regulatory norms and takes these charges seriously. We will carry out internal probe on the issues raised in the Sebi's order on Arora," its senior vice president Ajai Kaul said on Monday.
Though the market regulator has not named the asset management company, as a matter of prudence "we will study issues and seek an opportunity to present our side before the market regulator," Kaul said.
Asked about the pressure on the fund due to any redemption from unit holders, Kaul said: "We have not seen much redemption and do not feel the pressure."
Alliance MF was in touch with distributors and financial advisors to clarify situation and address their concerns, he added.
About 30 per cent of assets under the management of mutual fund are invested in equities, while the balance 70 per cent in debt instruments, he added.
As on July 30 last, the assets under the management of Alliance MF stood at Rs 2,860 crore (Rs 28.60 billion).
Arora, also the head of Asian emerging markets for Alliance Capital, resigned last week, and is slated to join hands with Rana Talwar-led Sabre Capital Worldwide to float a new firm for asset management business in India.
However, following the Sebi order on Arora, future of these plans are under cloud since Arora-Sabre combine would need market regulator's permission to start asset management company in the country, market sources said.
Meanwhile, the Investors' Grievances Forum in a statement said that the Sebi action against Arora was a 'welcome development' to protect small investors interest.
Corporates and banks involved in passing inside information to the mutual fund managers should be prosecuted, IGF said.
The gains from such inside information should be brought back to the concerned fund and distributed among small investors, it added.
