SEBI has imposed a fine of Rs.1.50 crore on Karvy Computershare (now known as KFin Technologies) for redeeming its investments in schemes of Taurus Mutual Fund in 2017 on the basis of 'privileged information'.
The order states that the RTA was in possession of the information pertaining to the 'default of Ballarpur Industries' ahead of other investors and that its decision to redeem all its investment in two Taurus Mutual Fund schemes was based on this 'privileged information'.
The default of Ballarpur Industries had led to losses for investors of Taurus Mutual Fund as the fund house had significant exposure to papers of Ballarpur Industries and related entities.
In a statement, KFin Technologies said the company will examine the order and decide further course of action.
It further said the order pertains to a matter of 2017 and related to Karvy Computershare when it was part of the erstwhile promoter group and management.
KFin Technologies is the successor entity where KCPL got merged in 2018. The present promoter of KFin Technologies is General Atlantic, the company added.
In the order, SEBI said that by redeeming all units in Taurus Liquid Fund and Taurus Ultra Short Term Bond Fund in February 2017, KFin Technologies made unlawful gain of about Rs 1.2 crore, Sebi said.
The regulator said the action of Karvy Computershare led to higher losses for other investors.
"The dealing in units of Taurus MF by Noticee clearly helped it avoid losses and which induced other investors to suffer losses larger than they would have had the Noticee redeemed units at post default values," SEBI said.
