Capital Group's the 'Big Client' in KP's trades
Capital Group said it is the unnamed fund in the Securities and Exchange Board of India's (Sebi) recent interim order that barred stock market operator Ketan Parekh and his associates from the local securities markets for front-running the investment fund's trades in the country.
The capital market regulator, in its January 2 order, barred both Parekh and Singapore-based Rohit Salgaocar, who was a consultant to Capital Group.
«We have worked closely with Sebi in their investigation and can confirm we had no knowledge of the unauthorised use of our order information,» said a Capital Group spokesperson, in response to ET's e-mailed query.
While Capital Group was not accused of any wrongdoing by Sebi, it was directed to take «appropriate actions for strengthening internal controls to prevent the occurrence of violations.»
Front-running is an illegal practice of purchasing a stock based on the unpublished information of a sizable transaction. The aim is to profit from short-term outsized moves in these stocks triggered by large trades.
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