DSP MF employees resign amid ongoing probe on violation of code of conduct

Official sources said that these DSP MF employees were not part of any investment activity that involved investors’ money. They resigned amid investigation into the alleged violation of code of conduct

Kumar Shankar Roy May 9, 2019

Resignation of employeesA few DSP MF employees have resigned amid an ongoing probe on the possible internal code of conduct violation. These five to six  individuals did not have access to investor money but were lending money to a former employee in their personal capacity. Such activities are considered as a violation of the internal code of conduct.

The news of employee resignation from a fund house is usually given an insider trading or fund misappropriation twist. However, official sources said that these DSP MF employees were not part of any investment activity that involved investors’ money. DSP MF is the 10th largest fund house in the country and oversees funds worth Rs 78,000 crore.

According to the version given by official sources to RupeeIQ, these individuals, on their own, engaged in lending activities with a former employee. Such practices are not encouraged in DSP MF and are considered as a violation of their code of conduct standards. Once the fund house found out about such dealings, it notified the employees and launched an investigation into the matter. Wary of this probe coming up with findings that could ruin their professional career, these employees have now resigned.

The company spokesperson sent this message on Whatsapp in response to our query:

It had come to our notice that certain employees of DSP were making personal transactions in the form of repeated personal loans to an ex-colleague. We expect voluntary reporting of such transactions under our internal compliance code of conduct. Therefore, transactions of this nature and such non-reporting of the same are deviations from what the organization expects from its employees. We strongly believe that such behavior is not consistent with the most important principle that we value at DSP – integrity. 
An internal investigation committee was set up and while the investigations were on, these employees resigned. For us reputation comes first and hence we accepted their resignations. 
It is important to note that the said violations relate to transactions done in their personal capacity and have absolutely no effect on clients or the business on the whole. 
Being a fiduciary, we follow a zero tolerance policy for non-compliance with any regulations and/ or code of conduct. What has transpired is a reinforcement of our commitment and belief in what we stand for. (Ends)

BlackRock Inc., the world’s largest asset manager, some months ago sold its 40% stake in DSP BlackRock Investment Managers Pvt. Ltd to joint venture partner DSP Group.

DSP Mutual Fund was set up as a trust under the Indian Trust Act, 1882. The fund-house is led by Kalpen Parekh (President). The AMC directors include Aditi Kothari Desai, Dhananjay Mungale, Hemendra Kothari, S. Ramadorai, S.S. Mundra, and Uday Khanna.

The sponsors to the Fund are DSP ADIKO Holdings Pvt. Ltd and DSP HMK Holdings Pvt. Ltd.

DSP Investment Managers Pvt. Ltd. (formerly DSP BlackRock Investment Managers Pvt. Ltd) is the asset management company to the Fund. DSP Trustee Pvt. Ltd. acts as the trustee to the Fund. The DSP Group, headed by Hemendra Kothari, is one of the oldest and most respected financial services firms in India.

Kumar Shankar Roy

Kumar Shankar Roy is contributing editor with RupeeIQ. Kumar is a financial journalist, with a functional experience of 15 years. He tracks mutual funds, insurance, pension, PMS, fixed income/debt and alternative investments markets closely. He has worked for The Times of India, The Hindu Business Line, Deccan Chronicle Group, DNA, and Value Research, among others, across different cities in India. He is deeply interested in marrying data insights with actionable opinion. He can be contacted at kumarsroy@rupeeiq.com.

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