By Siow Li Sen

GALLEON Asia, which is managed by former DBS executives, has not received any redemption requests and has full support from its prime brokers following the arrest of founder Raj Rajaratnam in New York for insider trading.

'We're healthy,' David Lau told The Business Times yesterday.

Mr Lau, who joined Galleon Asia in August last year, said the Singapore firm is not involved in what's going on in New York.

He has also kept the Monetary Authority of Singapore (MAS) in touch with developments.

An MAS spokeswoman last night said: 'MAS has been informed by Galleon Asia Pte Ltd that it is currently not the subject of SEC (US Securities and Exchange Commission) investigations in the US. Where we have clear evidence that a financial institution has breached our laws and regulations, we will hold the financial institution to account. Our communications with foreign regulators are confidential.'

Mr Lau used to run DBS's global financial markets before he quit to manage Galleon Asia together with Justin Pollock. The firm here, which employs 20 people, has assets of close to US$500 million.

In February this year, Frank Wong, former vice-chairman of DBS, was named chairman of Galleon Asia

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'We will not close in a week's time. For this current cycle, I can confirm right now there are no redemptions,' said Mr Lau.

Earlier, there was a report that traders close to Sanjay Santhanam, a Galleon partner and head of risk management, heard from him that the firm could be closed by Friday as investors bail out.

Galleon founder Raj Rajaratnam was arrested last Friday by US federal investigators on charges of insider trading. Bail has been set at US$100 million.

Redemptions at Galleon Asia are on a quarterly basis and these requests have up to Nov 16 to be made for redemption at year-end, said Mr Lau.

'During the worst times, we've never gated and we don't intend to gate,' he said.

Gated is industry-speak for preventing investors from taking back their money.

Mr Lau also said that the Singapore firm's prime brokers - banks which provide funding - have 'reaffirmed their support to us and have not withdrawn liquidity from us'.

A source said in New York that the group's prime brokers - reported to be Bank of America Merrill Lynch and Barclays plc - have withdrawn their support.

The source added that investors in Galleon Asia, which are mainly US funds that have an Asian mandate, are likely to have a clause in their constitution which forbids doing business with alleged felons.

'I am entirely innocent and will vigorously defend myself and our firm,' Rajaratnam, 52, said in a letter to employees and clients of the hedge fund firm, according to a Bloomberg report yesterday.

'As I move forward on my defence, I want to assure you that our commitment to our investors and employees will remain unwavering.'

This article was first published in The Business Times.