Sebi confirms ban for Hong Kong-based hedge fund

Factorial Capital Management is found not being able to disprove insider trading charges levelled against it earlier this year

Market regulator Securities and Exchange Board of India (SEBI) on Thursday confirmed its ban on Hong Kong-based hedge fund Factorial Capital Management Ltd, saying the fund has not been able to disprove insider trading charges levelled against it earlier this year.

In an interim order issued in June, Sebi had banned Factorial on suspicion that the hedge fund had shorted L&T Finance Holdings Ltd, an Indian financial services company, before the announcement of a share sale in the company in mid-March.

"The facts and circumstances, as alleged in the interim order, indicate a device or artifice to deceive the investors in the securities market and make profit in a manner which was quite disruptive to the market equilibrium," Sebi whole time director Rajeev Kumar Agarwal said in an order issued on Thursday.

Barun Agarwal, a director at the fund, declined to comment when reached by Reuters.