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Samir Arora, Asia-Pacific head of the US-based Alliance Capital Mutual Fund, today refuted the insider trading charges levelled against him by the Securities and Exchange Board of India.
"I have not done anything to the detriment of the unitholders of Alliance or any other capital market entity," Arora told
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Sebi on Saturday banned Arora from the stock market till further orders on charges of insider trading and compliance inadequacies and for indulging in unfair trade practices in thwarting Alliance Capital Management's attempts to sell its Indian operations.
Although Arora has already quit Alliance Capital to join the Rana Talwar-promoted Sabre Capital Worldwide in setting up a domestic mutual fund, he is likely to contest the Sebi decision along with Alliance Capital lawyers. The chambers of Zia Mody are the lawyers for Alliance Capital in India.
"I will work in conjunction with Alliance Capital's lawyers since this matter relates to decisions taken by me in my capacity as chief investment officer of Alliance Capital. We will co-operate with Sebi in the investigation process and will like to resolve this issue as early as possible," Arora said.
Dhawal Mehta, a research analyst based in India, might take charge of investments at Alliance in India during the transition period.
"Arora may file his objections, if any, within 15 days and also avail of a personal hearing, if he so desires, on August 28 at the Sebi office, failing which it will be presumed that he has nothing to say in the matter," T M Nagarajan, wholetime member of Sebi, said.
It is learnt that Sabre is consulting J Sagar Associates, its lawyers in India, on the issue.
Sabre had announced on August 5 that it will form an asset management company along with Samir Arora. It will decide on future action once the lawyers finish scrutinising the order and has not yet decided on the venture.
J Sagar Associates partner Somashekhar Sundaresan refused to comment on the issue.
Meanwhile, Digital GlobalSoft, the company named by Sebi in l'affaire Arora, in a press release said, "The company and its officials have been compliant with and conform to its policy guidelines and process, Sebi regulations, trading restraints and the applicable disclosure norms. Digital, therefore, maintains that it does not believe that any irregular flow of information could have emanated from within the company in this regard."
On the subject of non-declaration when crossing the shareholding threshold of 5 per cent in Balaji Telefims, Digital GlobalSoft, Mastek, Hinduja TMT and United Phosphorus, legal experts said this was a compliance issue.
"Samir is a fund manager. The charges may not stick. The Sebi order does not demonstrate that any law has been broken," said one legal eagle.
Experts pointed that if the Sebi order is upheld, it would become illegal for any fund manager to dream of becoming a shareholder.