On August 27, the capital market regulator SEBI issued a notice that Kotak Mahindra Asset Management Company (AMC) is debarred from introducing any fixed maturity plan (FMP) scheme for the consecutive six months. SEBI has imposed a fine of Rs 50 lakh due to delayed payments by the six FMP schemes to their holders in the year 2019 by the company.
SEBI took cognizance of the flow induced by the company and thereby decided the penalty on “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 to be permitting extension of the maturity of the zero-coupon NCDs of the Issuers in “contravention of extant regulations etc.”, it added.
“There remains no doubt in mind that the Notice 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,” the capital market regulator SEBI said.
Kotak AMC has also been directed to refund a part of the investment management and advisory fees collected from the unitholders of the six FMP schemes, it further added.
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 till the date of actual payment to the respective unitholders of the said schemes,” the order stated.
The note finally added, The fine amount, of Rs 50 lakh, is required to be paid to the Government of India within a period of 45 days.
