What Quant MF needs to clarify about the SEBI probe
Last Update Date: 05-10-2026
Published by freefincal
Abhishek Kumar's role: Wrote this article
Abhishek Kumar wrote this op-ed calling for greater transparency from the fund house and SEBI, arguing that protecting minority unitholders' trust should come first and citing Warren Buffett's handling of the Salomon Brothers crisis.
What Abhishek Kumar said
What should a fund house tell investors when the regulator is investigating it?
Plainly, what the inquiry is about. In the case I wrote about, the fund house had only confirmed receiving queries from SEBI and published an FAQ that clarified very little. Vague reassurance that the schemes stay liquid and that nothing will change does not calm anyone; when trust is already in question it tends to do the opposite, and unitholders respond by walking out. Unitholders are minority owners of the fund, and protecting their trust ought to come before protecting the firm's image.
Does SEBI also owe investors more information during such a probe?
I believe so. Daylight disinfects, and that applies to the regulator as much as to the regulated. If an inquiry into something as serious as suspected front-running is under way, a short, factual statement from SEBI about its nature and scope would do more to preserve confidence in the system than silence filled by speculation. The regulator's job is not only to investigate; it is also to keep the public's faith in the market intact while it does so.
What can fund managers learn from how Warren Buffett handled a trading scandal?
In the early 1990s a US bond dealer in which his company held a large stake was caught rigging government bond auctions, and its chief had failed to act on the trader. Buffett stepped in, cooperated fully with the authorities and told staff that losing money would be forgiven but costing the firm its reputation would not. That is what unitholders deserve to hear: that if there is any truth to the allegation, those responsible will face the full weight of the law. Integrity, not returns, is what makes a steward worth trusting.
In our words, from what he said in the piece. General information, not personal advice.
More of Abhishek's views on money management
An opinion piece on the 2024 SEBI probe into a mutual fund house over suspected front-running. It argues that the fund house's general statements and FAQ did little to reassure unitholders, and that both the asset manager and the regulator should share more about the investigation to keep investors' trust.
Publisher source
What Quant MF needs to clarify about the SEBI probe