Mumbai:  In a major insider trading case in shares of L&T Finance, Sebi refused to vacate its interim ban on Factorial Master Fund, a Hong-Kong based fund founded by an Indian origin banker, from securities markets. This hedge fund traded in derivative contracts of L&T Finance with Offshore Derivative Contracts (commonly known as P-Notes) through five different FIIs (Foreign Institutional Investors) —— namely Macquarie Bank, Goldman Sachs Singapore, Merrill Lynch CM Espana, Nomura Singapore and Citigroup Global Markets Mauritius Ltd. Besides, a probe by the capital markets regulator found that Factorial was involved as potential investor in the market gauging exercise undertaken by Credit Suisse as ‘Seller Broker’ of L&T Finance for its Offer for Sale (OFS) in March.

Confirming the order, Sebi said Factorial was guilty of violating fraudulent and unfair trade practices regulations and the fund traded on the basis of its access to unpublished price sensitive information (UPSI), based on which it took such aggressive positions.

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