Quant confirms SEBI's data collection 'not part of regular process'
The Securities and Exchange Board of India (SEBI) executed a court-approved search-and-seizure operation at Quant Mutual Fund. This operation is part of an ongoing investigation into the suspected front-running of trades. The mutual fund house confirmed this in an email to its investors today, stating, "The data collected by the regulator was not part of any regular process but was part of a court-approved search and seizure operation with respect to an ongoing investigation initiated by SEBI."
Legal implications of SEBI's search-and-seizure operation
Legal experts suggest that a search-and-seizure operation is more severe than standard regulatory inquiries. Vasudha Goenka, Partner at Cyril Amarchand Mangaldas, explained, "A search and seizure operation is carried out pursuant to the investigating authority of SEBI obtaining an order of the magistrate or judge of the designated court under Section 11C (9) of the SEBI Act." She added that such operations allow lawful entry into premises to search and seize documents, as deemed necessary by the investigating authority.
Quant CFO resigns amid SEBI investigation
Quant Mutual Fund announced that its Chief Financial Officer (CFO), Harshal Patel, resigned in February before the SEBI probe began in June. Initially, personal reasons were cited for Patel's departure. The fund house later named Shashi Kataria as his successor effective from July 1. Kataria brings with him 20 years of experience in audit, accounting, direct and indirect taxation, financials & MIS, payroll, and labor law compliance.
Quant Mutual Fund pledges cooperation with SEBI
SEBI initiated an investigation into Quant Mutual Fund in June over possible front-running operations, a practice considered illegal in the stock market. The fund house has pledged to cooperate with the regulator throughout the investigation. With over 80 lakh folios and over ₹93,000 crore in assets under management (AUM), Quant is among the fastest-growing fund firms in India.
