Invesco Mutual Fund settles inter-scheme transfer case by paying Rs 5 cr to SEBI
In January this year, an application was submitted to settle the case by paying a penalty of Rs 4.98 crore, which SEBI accepted at its February meeting. The money was deposited by Invesco and its officials this month.
- Apr 24, 2024,
- Updated Apr 24, 2024 8:57 PM IST
Invesco Asset Management Company, its CEO Saurabh Nanavati, and four others have paid Rs 4.98 crore to the Securities and Exchange Board of India (Sebi) to settle a case linked to alleged violations of mutual fund and portfolio management norms. The market regulator has taken an undertaking that the systems have been put in place to prevent recurrence of similar lapses.
The case is based on a probe conducted by the SEBI into the possible violations during the 2018-2020 debt fund crisis. In 2021, the capital market regulator found that there was no clear segregation of activities between portfolio management activities and mutual fund activities of the firm, and Chinese wall between PMS and MF activities.
It found that investments were also shifted between the two business and the key managerial personnel failed to make investments to achieve the stated benefit of investors.
In its 2023 showcause order, the Sebi said: “Inter-scheme transfers were executed and there were movements of securities/pre-arranged trades/layered trades between schemes of Invesco MF and PMS Advisory in violation of the provisions of Sebi (Mutual Funds) Regulations.”
The showcause order was issued to Invesco AMC, Saurabh Nanavati (CEO), fund managers Sujoy Das, Nitish Sikand, Krishna Cheemalapati and Suresh Jakhotiya (director compliance).
The AMC had filed for settlement without admitting or denying the findings of fact. Sebi has settled the matter after a recommendation from its High-Powered Advisory Committee.
The Sebi had heard the AMC in 2023, after issuing it the show cause notice. In October 2023, the regulator received a response to the notice and intent to settle the case through a consent application. This process allows offenders to resolve the matter by paying a penalty without admitting or denying the allegations.
In January this year, an application was submitted to settle the case by paying a penalty of Rs 4.98 crore, which SEBI accepted at its February meeting. The money was deposited by Invesco and its officials this month, and SEBI issued the settlement order on Wednesday.
Besides Nanavati, the other officials who will pay the settlement fine are former fund manager Nitish Sikand, Krishna Venkat Cheemalapati, a fixed income fund manager at Invesco India MF, and Suresh Jhakotiya, the Head of Compliance.
Invesco Asset Management Company, its CEO Saurabh Nanavati, and four others have paid Rs 4.98 crore to the Securities and Exchange Board of India (Sebi) to settle a case linked to alleged violations of mutual fund and portfolio management norms. The market regulator has taken an undertaking that the systems have been put in place to prevent recurrence of similar lapses.
The case is based on a probe conducted by the SEBI into the possible violations during the 2018-2020 debt fund crisis. In 2021, the capital market regulator found that there was no clear segregation of activities between portfolio management activities and mutual fund activities of the firm, and Chinese wall between PMS and MF activities.
It found that investments were also shifted between the two business and the key managerial personnel failed to make investments to achieve the stated benefit of investors.
In its 2023 showcause order, the Sebi said: “Inter-scheme transfers were executed and there were movements of securities/pre-arranged trades/layered trades between schemes of Invesco MF and PMS Advisory in violation of the provisions of Sebi (Mutual Funds) Regulations.”
The showcause order was issued to Invesco AMC, Saurabh Nanavati (CEO), fund managers Sujoy Das, Nitish Sikand, Krishna Cheemalapati and Suresh Jakhotiya (director compliance).
The AMC had filed for settlement without admitting or denying the findings of fact. Sebi has settled the matter after a recommendation from its High-Powered Advisory Committee.
The Sebi had heard the AMC in 2023, after issuing it the show cause notice. In October 2023, the regulator received a response to the notice and intent to settle the case through a consent application. This process allows offenders to resolve the matter by paying a penalty without admitting or denying the allegations.
In January this year, an application was submitted to settle the case by paying a penalty of Rs 4.98 crore, which SEBI accepted at its February meeting. The money was deposited by Invesco and its officials this month, and SEBI issued the settlement order on Wednesday.
Besides Nanavati, the other officials who will pay the settlement fine are former fund manager Nitish Sikand, Krishna Venkat Cheemalapati, a fixed income fund manager at Invesco India MF, and Suresh Jhakotiya, the Head of Compliance.