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Goolam’s son-in-law fined by UK regulator

Indian origin broker Tariq Carrimjee of Somerset Asset Management LLP, was fined a sum of £89,000.

ABHINANDAN MISHRA  New Delhi | 7th Sep 2013

he British market regulator Financial Services Authority (FSA), has fined Indian origin broker Tariq Carrimjee of Somerset Asset Management LLP, a sum of £89,000. It has banned him from performing any roles in regulated financial services, that is broking. Carrimjee is the son-in-law of the Attorney General of India, Goolam Vahanvati.

Confirming the imposition of the fine, David Cross from the press office of the FSA, told this newspaper that Carrimjee was referring the case to the United Kingdom's Upper Tribunal for appeal. "Carrimjee has been prohibited from performing any function in relation to any regulated activity carried on by any authorised or exempt person or exempt professional firm. He was found to be recklessly assisting one of his clients to manipulate the closing price of global depository receipts (GDRs) related to two companies," Cross said. This is what the FSA's decision says as well.

There was no response to the email queries sent by this newspaper at the email address of Somerset Asset Management at the time the story went to press.

The decision notice says that the FSA "has decided to: a) withdraw Mr Carrimjee's individual approvals, pursuant to section 63 of the Act; b) make an order pursuant to section 56 of the Act prohibiting Mr Carrimjee from performing any function in relation to any regulated activity carried on by any authorised or exempt person or exempt professional firm; and c) impose on Mr Carrimjee a financial penalty of £89,004, pursuant to section 66 of the Act, for breaching Statement of Principle 1."

Carrimjee, who is the director of the London-based Somerset Asset Management LLP, was allegedly involved in manipulating the closing price of the GDRs of two companies, Reliance Industries Limited in October 2010 and Gazprom in April 2010, Russia's largest gas producing company.

In its decision notice of 26 March, which was made public last month, the finding in the case indicated "a serious lack of integrity on the part of Mr Carrimjee".

"The FSA has decided to take this action because it has found that Mr Carrimjee failed to act with integrity ... when he recklessly assisted his client, Mr Rameshkumar Goenka, in Mr Goenka's plan to manipulate the closing price of Gazprom GDRs in April 2010 and Reliance GDRs in October 2010. In making this finding, the FSA considers that Mr Carrimjee suspected that market manipulation was the goal of his client and Mr Carrimjee suspected that Mr Goenka held structured products which were related to the intended manipulation, yet he turned a blind eye to the risk of Mr Goenka's planned market abuse and recklessly assisted his client in his attempt to achieve that goal," says the note.

"The FSA (Financial Services Authority) also considers that Mr Carrimjee is not a fit and proper person to perform any function in relation to any regulated activity carried on by any authorised or exempt person or exempt professional firm. In light of the above the FSA considers that Mr Carrimjee poses a serious risk to consumers and to confidence in the financial system if he continues to act as an investment adviser, or is involved in the running of, or holds a senior management role with, another authorised firm in the future," states the

decision.

The decision further states, "The FSA therefore considers that it is necessary and proportionate to withdraw Mr Carrimjee's individual approval and to prohibit Mr Carrimjee from performing any function in relation to any regulated activity." The FSA, in the same case, imposed a fine of £6 million on Rameshkumar Goenka, the businessman who was Carrimjee's client. Goenka is a Dubai-based private equity investor. According to officials, the fine on Goenka is the largest that FSA has imposed against an individual.

 
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