We are committed to make up for the losses: Waqar Naqvi, CEO, Taurus MF

Three debt schemes of Taurus Mutual Funds were badly hit after a downgrade of the commercial papers issued by Ballarpur Industries last month. Fitch Ratings has downgraded the paper further. Shivani Bazaz of ET.com Mutual Funds talked to Waqar Naqvi to find out how the troubled fund house plans to deal with the fiasco. Edited interview.

There are further downgrades today on the Ballarpur Industries. Certain schemes of Taurus Mutual Fund have been badly hit by this entire fiasco. What is the fund house doing for the troubled investors at this point?

We are in touch with our investors constantly. Every two weeks we are getting in touch with our investors and sending them written communications. We have kept all investors informed and there is complete transparency from our side. The communications are about everything that we as a fund house are doing to recover from this situation.


What are you communicating to them? What plan do you have to make up for the losses?

The company (Ballarpur Industries) has given us a repayment plan, which is for a part of the amount. We are asking them to accelerate the payment to us. They have said that they will come back to us with the best possible repayment plan. That is where the matter is right now. We are hopeful that things will fall in line soon.

Apart from the Ballarpur Industries’ promise of repayment, what is the Taurus MF’s management doing? Is there a plan B?

We have communicated to all the investors that whatever recovery happens should go to only those investors who have been affected by this situation. Even if the investors have exited, we are trying our best so that they get their money back. For that, what we have done is, we suspended subscriptions in our schemes on the next day of the default. So that no new investor can come and take advantage of the recovery plans. We also stopped charging AMC fees immediately. We are not making any money out of this. We are also suffering losses because of all this. But we are committed for our investors and we are trying our level best to make up for the losses when recovery happens.

What is the pace of redemptions from the schemes that were hit badly? Are loyal investors still sticking to the fund house?

Investors have been moving out slowly. I won’t say there was a rush to move out. The downgrading event happened and after that we took steps in terms of marking it down by 100 per cent to ensure that the retail investors don’t suffer. After that the portfolio was of such a superior quality that if you exited it the next day or you waited for 15 days and exited, it did not matter. But, we haven’t stopped redemptions; we have actually geared up to meet all redemptions. We don’t want it to be inconvenient for the investors.

How confident are you about the success of your plans? Should investors stick to the fund house and wait for your recovery plans?

Whether they stick or they don’t, we are working in a manner that even those investors who have exited will get their money back. We can’t force anyone to stay invested but we are committed to make up for the losses that they have incurred. I would just say that we have not violated any regulations. Till the time a default doesn’t happen, everything is fine and when it happens, there are accusations and speculations. I would stick to it that we have not violated any regulations.