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SEBI has imposed a fine of Rs. 25 lakh on PGIM India MF for doing unfair inter-scheme transfers (ISTs) of debt papers in 2019. Also, the regulator has fined PGIM AMC's CEO Ajit Menon (Rs. 5 lakh) and the then fund managers Kumaresh Ramakrishnan, Puneet Pal and Rakesh Suri (Rs. 2 lakh each).
According to the regulator, the AMC and its fund managers had put investors of closed ended schemes at a disadvantage by transferring downgraded and 'soon-to-be downgraded papers' from open ended schemes to close ended schemes. In some instances, good quality papers were transferred from close-ended to open-ended schemes.
SEBI said the transfers were unfair to the investors of open-ended schemes as well. It said, "The ISTs which were done by the fund managers during the period of inspection were apparently prejudicial to the interest of close ended scheme holders and was unfair to both sets of investors (i.e. open and close ended scheme) as the inter scheme transfers were only to window dress the NAV and was inherently not intended to protect the interest of either sets of subscribers," SEBI said in the order.
