SEBI has banned Kotak Mahindra AMC from launching new fixed maturity plan (FMP) schemes for the next six months.
The order came in a case pertaining to the fund house's six FMP schemes that were due for maturity in April-May 2019. At that time, the fund house did not make full payment to investors due to the default of Essel group companies in which these schemes invested.
Responding to the order, the AMC said, “All investors have been fully repaid along with applicable interest in September 2019.”
The market regulator has also imposed a fine of Rs 50 lakh and directed the AMC to refund a part of the investment management and advisory fees collected from the unitholders of the six FMP schemes along with an interest of 15% per annum.
"The noticee is directed to complete the exercise of payment of funds to the respective unitholders and submission of compliance report to the abovementioned authority within a period of 45 days from the date of this order," the markets regulator said in its order.
SEBI found that the AMC showed lack of due diligence and did not disclose adverse information to unitholders. The other violations noted by SEBI were extension of maturity date of NCDs beyond the maturity date of the scheme, partial redemption and not winding up FMPs at the end of maturity, creation of segregated portfolio and wrong method of valuation of securities.
