MUMBAI: On Friday August 27 the Kotak Mahindra Asset Management Company has been restricted to launch any new Fixed Maturity Schemes for six months from today as per the order issued by Securities and Exchange Board of India (SEBI).
SEBI also inspected the six ongoing FMP schemes of Kotak AMC and imposed a fine of 50 lakhs.
The regulating entity said that these actions have been taken on the basis of “various acts of indiscipline, utter neglect of due diligence, inordinate delay in communicating with the investors, violation of the statutory sanctity of the maturity dates of the FMP schemes”.
The company was also found allowing extension of the maturity of the zero coupon non convertible debentures of the issuers in “contravention of extant regulations etc.” SEBI added.
“There remains no doubt in mind that the Noticee has acted in gross violation of provisions of the SEBI Act, 1992, MF Regulations, 1996 as well as various circulars issued by SEBI from time to time,” said the market regulator.
Kotak AMC has also been ordered to refund a part of the investment management and advisory fees collected for these FMP schemes to the unitholders .
“The collected amount should be equivalent to the percentage of exposure to the ZCNCDs of the Issuers in the respective schemes as on the date of maturity of the six FMP schemes, along with a simple interest at the rate of 15% per annum from the date of maturity of such scheme still the date of actual payment to the respective unitholders of the said schemes,” said the order.
SEBI has directed that the fine amount of 50lakhs is to be paid to the Government of India in 45 days.