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SEBI has imposed a fine of Rs.5 lakh on L&T Mutual Fund (now HSBC Mutual Fund) for not maintaining adequate records that justify their investment decisions in certain stocks.
The regulator found that the fund house did not properly justify its investment and exit decision in Hindustan Zinc, Sadbhav Engineering and Vodafone Idea.
The regulator has found three major violations in their investment management:
- Not maintained detailed research report that helps fund houses in analyzing various factors for the initial investment decision taken in the scrip
- Not properly recording the reasons for subsequent investment decisions
- Not establishing a mechanism to verify that due diligence has been exercised to make investment decisions
SEBI has asked the fund house to pay the penalty within 45 days.
