Quant MF confirms reports of search and seizure ops for the first time

Quant Mutual Fund on Saturday confirmed that the regulatory enquiry was not a regular exercise but "a court-approved search and seizure operation” carried out with respect to an ongoing investigation initiated by the Securities and Exchange Board of India (Sebi).

On June 27, Quant MF issued an FAQ, characterising the Sebi enquiry as a routine procedure. "It's a regular, ongoing process worldwide, where regulators collect and analyse data," it said.

However, in a latest email to investors, the fund house updated the FAQ, for the first time conceding that the Sebi action 'not a regular exercise.' All other responses of the FAQ  remain unchanged.

Notably, Quant MF claims to have received no further communication from the regulator since the searches were conducted.

The first reports of Sebi searches at the fund house premises came to light on June 23. As per sources, the regulator is investigating possibilities of front running at the fund house. The searches followed discrepancies noted during regular inspections.

While the fund house did not refute the media reports, its initial response only stated that it had received enquiries from Sebi.

The investigation led to a small dent in the total assets of the fastest growing major fund house in India.

According to a report by Value Research, Quant MF faced its first weekly net outflows of 2024 in June’s final week, at Rs 2,800 crore. This outflow was seen as breaking a six-month streak of positive inflows by the fund house. At the end of June, the total assets under management (AUM) of the fund house stood at Rs 89,869 crore.