Last Updated on July 24, 2020 at 8:55 am
We all woke up to the shocking news yesterday that Parah Parikh died in a car crash in the US on Sunday (May 3rd). He was not wearing a seat belt. His wife was wearing one, but still sustained serious head and chest injuries and is critical.
Yesterday afternoon, the PPFAS management sent an email announcing his death with a disturbing postscript:
PS: Mutual fund is functioning normally for all transaction.
Disturbing because even in this hour of shock disbelief and sorrow, they had to comfort investors that all is well.
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Yes, investors are worried.
Worried that the founder of the organization is dead.
Worried that the driver of the car was fund manager, Rajeev Thakkar. While he only sustained minor injuries, he could be facing a charge of misdemeanor motor vehicle homicide
Accoring to Nebraska law, this is typically a class I misdemeanor and could entail imprisonment up to 1 year. However, since Rajeev has no criminal record, the punishment, if delivered, might be one of probation and community service.
However, considering Rajeev is not a US citizen, I do not know how the judge will rule.
In any case, I dont think Rajeev can come back to India until this case is resolved.
In the meantime PPFAS will have to act per SEBI regulations in such matters (fund manager facing trial, on leave of absence etc.).
Since these are not criminal charges, I dont think Rajeevs registration will be cancelled by SEBI. Howver, it is possible that until the matter is settled, Rajeev might have to step down for a brief period.
I dont think that the PPFAS management will abandon Rajeev, at least for professional reasons.
What should you and I do?
We should – do nothing.
I am an NFO investor in PFFAS. I did not invest beacuse of Parag Parikh or Rajeev. I invested because of the strategy. I dont think that is going to change. It could, of course, but I just dont think so.
I will do to PPFAS holdings, what I will do with any of my other holdings. Review periodically and act only when there is visible underperformance.
Let us leave PPFAS alone for a while. Give them space to mourn and sort things out.
Apologies for the sepculative nature of this post.
References:
- US new report
http://www.wowt.com/home/headlines/BREAKING-Two-Critical-Two-In-Serious-Condition-After-Morning-Crash-302342921.html
- Nebraska law
http://nebraskalegislature.gov/laws/statutes.php?statute=28-306
- SEBI fund manger rules
http://www.sebi.gov.in/acts/act122.html#ch3a