Alliance to hand over MF assets to Birla Sun Life

Alliance Capital Management Corporation on Monday announced that it was transferring its schemes in India to Birla Sun Life Asset Management. Alliance said it had decided that the growth opportunities for its asset management business in India "had diminished".

In a media statement, Alliance Capital said that it had reached this conclusion after a lengthy review of strategic options available for its Indian mutual funds business.

The company said that it was pleased that its schemes were proposed to be handed over to the Birla SunLife, which "is a respected financial services organisation with a strong and successful track record in building its asset management franchise."

Incidentally, the entire deal was dependent on the regulatory approval of the Securities and Exchange Board of India to whom Birla SunLife has applied.

Alliance Capital said that regulatory approvals are expected early next year. With respect to its employees here Alliance said that it has separately addressed their interests.

S V Prasad, chief executive of Birla MF, said the schemes would be good fit since many of them were top performing. He dismissed all the allegations against the company, saying that it was the schemes performance which mattered.

"Anyway we are acquiring the schemes and the underlying assets and not the AMC," he pointed out.

Rajnish Narula, who heads Alliance Capital in India, said that employees of his company had been given sufficient time to make their own arrangements. He also said that he hoped that there would no roadblocks in the form of hitches in regulatory approvals.

Alliance Capital has been under a cloud since last year when it was hauled up by Sebi on charges of insider trading by its former chief investment officer Samir Arora while the fund itself was penalised for violation of insider trading regulations and other non-compliance on disclosures.

Moves SAT against Sebi fine

Alliance Capital Management has appealed to the Securities Appellate Tribunal against the Rs 15 crore fine imposed on it by the Securities and Exchange Board of India (Sebi) for violation of insider trading regulations.

Rajnish Narula, CEO of Alliance Capital Mutual Fund, confirmed this development. The appeal was filed around two weeks back, he said.

On August 18, Sebi had issued the order against Alliance and two other associated Alliance entities. It also involved other market manipulations. Alliance has not yet paid up the fine. Incidentally it also has been hauled up by Sebi for for certain non-disclosures.