Fund manager of Deutsche Mutual Fund and his parents paid nearly Rs 5 crore to settle with Sebi a case of alleged front running in the trades of the mutual fund.
The amount remitted by them includes settlement charges, wrongful gains and interest charged on the ill-gotten gains.
Akash Singhania, the fund manager of Deutsche Mutual Fund (DMF) allegedly had knowledge of investment and impending orders of the fund.
He had opened four trading accounts for the purpose of front running, through his parents– Ashok Kumar Singhania and Premlata Singhania.
The couple had access to these trading accounts and were trading ahead of the orders of DMF and thus acted in concert to front run the trades of DMF.
They earned a profit of Rs 1,42,21,775, Sebi noted. They allegedly violated Prohibition of Fraudulent and Unfair Trade Practices norms.
Pending the proceedings, they filed a settlement application with the regulator, proposing to settle, without admitting or denying the guilt.
The High Powered Advisory Committee considered the settlement terms proposed by the applicants and recommended the case for settlement upon payment of Rs 2,35,72,592 as settlement amount along with disgorgement of wrongful gains (Rs 1,42,21,775) with interest thereupon at the rate of 12 per cent, amounting to Rs 1,21,00,588, on joint and several liability basis.
Sebi, in the settlement order dated December 22, confirmed the credit of the payments.
“The pending enforcement proceedings for the alleged default … are settled qua the applicants,” the regulator said.
This is subject to certain conditions. The proceedings may be restored if any representation made by the applicants in the settlement proceedings is subsequently found to be untrue.