• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

I read recently that the fund manager Mr Samir Arora has been debarred from stock market operations by SEBI for five years. Can you let me know the impact of this decision on the valuations/ management of the equity funds of Alliance?

Kishore Gabbita

The recent order banning Mr Samir Arora from market operations for five years will have no direct impact, either on the operations or the management of Alliance Mutual Fund schemes, because Mr Arora is no longer part of the fund management team at Alliance. He had resigned as Chief Investment Officer to join a private equity firm in August 2003. At the time, Business Line did recommend that investors pare exposures in some equity funds managed by Alliance Capital, to avoid the uncertainties associated with Mr Arora's departure. But having stayed on through the crisis , whether you should now sell your equity funds will depend on your own return targets and the performance of the funds you own. If you hold Alliance Buy India or Alliance New Millenium fund, it may be best to sell the funds and switch to diversified equity funds with a good long-term track record, which stand a better chance of generating a reasonable return from the present market levels.

You may consider funds such as Franklin Bluechip, HDFC Equity and HDFC Taxsaver among your possible choices. You may also consider selling Alliance Equity Fund, as its five-year track record is inferior to that of the above funds.

If you hold Alliance Capital Tax Relief or Alliance Basic Industries, you can hold on to your exposures. Both have done well, even after Mr Arora's departure.

Two uncertain factors that continue to hover over Alliance Capital India are: A possible investigation by SEBI into the role of the board of directors and the trustees in the Samir Arora affair and the revival by Alliance Capital of its plans to exit India. As an investor, you should watch for further developments on this front. In the meantime, it may be better to diversify your investments across fund houses other than Alliance Capital.

(Queries may be e-mailed to mf@thehindu.co.in, or sent by post to Business Line, 859/860 Anna Salai, Chennai 600002.)

Aarati Krishnan

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
On stock option and employee stock ownership plans

Copyright © 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line