The SEBI has barred Kotak Mahindra Asset Management Company from launching any new fixed maturity plan (FMP) for the next six months for not paying full proceeds to investors of certain FMPs as per the Net Asset Value (NAV) as on their respective maturity dates.
The capital market regulator has also imposed a penalty of Rs 50 lakh on the the AMC, along with asking the company to refund a part of the investment management and advisory fees collected from the unitholders of the six FMP schemes.
The refund would be equivalent to the percentage of exposure to the Zero Coupon Non-Convertible Debentures (ZCNCD) 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 cent per annum from the date of maturity of such schemes till the date of actual payment to the respective unitholders of the said schemes.
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"Securities and Exchange Board of India (hereinafter referred to as 'SEBI'), noticed that the investors of certain Fixed Maturity Plans (hereinafter referred to as 'FMP'), launched by the Kotak Mahindra Mutual Fund (hereinafter referred to as 'KMMF'/'the Fund'), were not paid their full proceeds based on the declared Net Asset Value (hereinafter referred to as 'NAV') of the said schemes as on their respective maturity dates," it said.
The fund house has also been directed to submit a compliance report to the regulator, mentioning therein the details of such payments made to the unitholders of the six FMP schemes.
The SEBI has asked the noticee to complete the exercise of payment of funds to the respective unitholders and submission of compliance report to the abovementioned authority within a period of 45 days from the date of this order.
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The case pertains to six of the AMC's fixed maturity plans which were due for maturity in April 2019. The fund house had failed to make full redemptions to its investors at the time of schemes' maturities as the said schemes had invested in companies including Essel group companies which had defaulted on their payments.