Galleon's investment under Sebi watch
By siliconindia   |   Wednesday, 21 October 2009, 22:15 IST   |    1 Comments
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Galleon's investment under Sebi watch
Bangalore: The Securities and Exchange Board of India (SEBI) said it is 'closely watching' investments made by New York-based hedge fund Galleon, whose Sri Lankan founder Raj Rajaratnam was arrested for alleged insider trading. Even though Sebi sources said there was no concrete evidence so far of any insider trading in the Indian market by the hedge fund, but the regulator would not leave anything to chance, according to Rediff. The hedge fund has investments in only three listed companies in India - 7.04 per cent in Edelweiss Capital, 4.61 per cent in Shriram EPC and 0.22 per cent in Pipavav Shipyard. It also has investments in Reliance Telecom Infrastructure, but details are not known as the company is still unlisted. The Pipavav Shipyard stock plunged as much as 16.6 per cent, before recovering to trade down 1.2 per cent at 56.45. The hedge fund bought Pipavav shares as a part of its pre-IPO placement. The shares have a one- year lock-in. The Edelweiss stock fell three percent to close at 504 on concerns that the shares held by Galleon might come up for sale. But the stock recovered from the intra-day low of Rs 494.50 on reports that the Edelweiss management was in talks with the hedge fund to buy back the stake. Sources close to Edelweiss said that the firm had over 60 foreign institutional investors and Galleon's stake was the fourth largest. It has already received offers from 15 foreign institutional investors should Galleon want to sell. The sources said most of the other investments by Galleon in India were in the form of participatory notes, which are derivative instruments used by investors or hedge funds that are not registered with Sebi to invest in Indian securities, so it would be difficult to ascertain the amount of such investments. Since the fund is still active, the shares it holds via P-notes might come up for sale in the coming days.

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