Quant Mutual Fund has informed investors that the search and seizure operation by the Securities and Exchange Board of India (Sebi) last month was not part of regular process but was a court-approved action with respect to an ongoing investigation. This is for the first time that the fund house has acknowledged that the action was not routine. The market regulator is probing the fund house for alleged front-running activities.
In its email to investors, the fund house said it has not received any communication from the Sebi after the initial inquiries. Quant MF added that its offices are currently functioning normally and at full capacity, and that there are no Sebi officials stationed at the offices.
In a separate statement, the fund house said in the past three weeks since the Sebi action, it has seen net equity outflows of Rs 877 crore, which is less than 1% of its AUM of Rs 94,000 crore. “Our liquidity situation remains extremely healthy (as) more than 54% assets are very liquid, which includes large-cap stocks, treasury bills, government securities, gold and silver,” it said. Further assuaging investor concern around liquidity, the fund house highlighted that its AUM at Rs 94,000 crore as of July 12 was an all-time high.
The fund house’s chief executive officer Sandeep Tandon addressed some of these queries through a webinar with a few stakeholders.
On Friday, the fund house also announced a change of chief financial officer (CFO) but refuted claims that it had anything to do with Sebi’s inquiry. Harshal Patel tendered his resignation as CFO on February 19 and his last day of service with the company was May 19, which was before the Sebi inquiry began, said the fund house. Patel was with Quant MF for around eight years and appointed as associate vice-president (finance and accounts) in October 2022 as per his LinkedIn profile. He has been replaced by PPFAS Asset Management’s Shashi Kataria effective July 1.