Friday, January 25, 2008

Can we accuse MFs of "insider trading" ??

Just read the article, “When MFs raise capital & a stink” (Economic Times, Mumbai, Pg 15) by Gaurav Pai & Muthukumar K.

Very interesting stuff ..

The mutual fund companies ofetn invest in their own Group companies - but of course, SEBI has a limit, which they do not cross ;)

Did you know...

1. Reliance Mutual Fund has invested Rs. 1,726 crores of YOUR money, in its own R-ADAG group companies like Adlabs, Rel Comm and Rel Energy?

2. ICICI Prudential Mutual Fund has invested Rs. 678 crores of your money in its own ICICI Bank?

3. SBI Mutual Fund has invested Rs. 459 crores of your money in its own SBI?

4. Birla Sun Life has invested Rs. 251 crores of your money in Hindalco, Grasim and Idea Cellular?

HDFC Mutual Fund seems to be the most prudent! It has invested only Rs. 74 crores of your money in HDFC and HDFC Bank. And the article state that Tata MF and Kotack AMC have a miniscule investment in thier own Group companies.

Kinda makes you think, right ?

Shouldn't there be some rule on "insider trading" ... because at the Top management level - these guys are the SAME !! Are you listening SEBI ??

Unless, you actually believe that the Head of Reliance Mutual Fund DOES NOT know what the rest of the Group companies are up to .. yeah, sure .. !

And we wonder why Reliance MF has become the No. 1 MF with the highest AUM (Assets Under Management) ...

Coincidentally, at the same time the R-ADAG group companies' market capitalisation has almost doubled in the last one year...


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