Sundaram Mutual Fund, a unit of BNP Paribas’s former partner in India, said it will “wait and see” before deciding what to do with investments in a brokerage involved in a probe into bribes and improper loans.
“We will take a commercial call, keeping the long-term interests of our investors in mind,” TP Raman, managing director at Sundaram Mutual, said in a phone interview on Thursday.
Sundaram Mutual, a unit of Sundaram Finance, manages three funds that own a combined 1.49% stake in Money Matters Financial Services, the Mumbai-based brokerage, according to data compiled by Bloomberg. Shares of Money Matters tumbled by their 20% limit for a second day, reaching Rs 427.05 in intraday trade.
Rajesh Sharma, chairman of Money Matters, was on Wednesday taken into custody by India’s federal investigating agency for allegedly conspiring with others to bribe state-run lenders’ executives in exchange for loans for clients and confidential information.
Executives at Money Matters weren’t available at their offices, which have been sealed by the agency.
Separately, India Infoline advised Money Matters Financial Services for a sale of shares to large investors this year and hasn’t used the securities firm for debt syndication or lending money.
“We did our due diligence but you cannot do an investigation,” India Infoline’s Chairman Nirmal Jain said in a phone interview from his office in Mumbai on Thursday. “As an investment banker, we did our job.”
Rajesh Sharma, chairman of Mumbai-based Money Matters, was among eight people arrested by India’s federal investigating agency on Wednesday following a probe into bribes and improper loan disbursals.
India Infoline shares sank 15%, the most in 19 months, to Rs 91.3 as of the 3:30 pm close in Mumbai.
Money Matters fell% for the second day on the Bombay Stock Exchange to close at Rs 427.05.
Source: http://www.indianexpress.com/news/scam-sundaram-mf-waits-n-watches/716114/2
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