IDBI MF, trustee settles case with Sebi, pays over Rs 90 lakh

In view of this event, information was sought from all the mutual funds seeking details of their exposure(s) in the debt papers of BILT.

ET Online
The case was settled after the two entities approached Sebi to settle the instant proceedings without admitting or denying the findings of fact and conclusions of law through a settlement order.
New Delhi: IDBI Asset Management and IDBI MF Trustee Company on Monday settled a case pertaining to alleged violations of mutual funds norms with market regulator Sebi after paying over Rs 90 lakh towards settlement charges.

The case was settled after the two entities approached Sebi to settle the instant proceedings without admitting or denying the findings of fact and conclusions of law through a settlement order.

The instant adjudication proceedings initiated against the noticees (IDBI Asset Management and IDBI MF Trustee Company) ...are disposed of," Sebi said in a settlement order.


The regulator had observed that the credit rating of Ballarpur Industries Limited (BILT) was downgraded by India Ratings and Research on February 22, 2017, and the schemes of Taurus Mutual Fund were impacted due to the same.

In view of this event, information was sought from all the mutual funds seeking details of their exposure(s) in the debt papers of BILT.

In this context, IDBI Asset Management informed that schemes of IDBI Mutual Fund had not held any investments in securities issued by BILT as on January 31, 2017.
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However, Commercial Papers (CPs) issued by Bilt Graphic Paper Products Ltd. (BGPPL) , a subsidiary of BILT, were held by its few schemes. These CPs got matured on January 13, 2017 and the issuer, BGPPL had not repaid the principal amount of the said CPs on maturity.

Following this, an inspection was carried out by Sebi in January, 2018 and the regulator, prima facie, noted that IDBI Asset Management and IDBI MF Trustee Company had allegedly failed to comply with the mutual fund norms.

The Securities and Exchange Board of India (Sebi) had issued show cause notices in September 2019 to the entities for the alleged violations.

In a separate order, Ketan Shah settled alleged disclosure lapses matter with Sebi on payment of a little over Rs 6 lakh towards settlement charges.
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Sebi had conducted a probe in the matter of Seshasayee Paper and Boards and observed that for the change in type of shareholding from normal shareholder to promoter shareholder, Shah was required to make requisite disclosures to the company under the PIT (Prohibition of Insider Trading) norms but he allegedly failed to do so.
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