Sebi penalizes Kotak AMC’s Nilesh Shah, 5 others

In the 104-page judgment order, the adjudicating officer of the regulator found fault with the conduct of AMC and its officers on two grounds – extension of maturity of papers relating to Essel Group, and lack of due diligence while investing in Essel Group companies.

“It is observed that Kotak AMC entered into an agreement with the promoters of Essel Group and other promoter entities to extend the maturity period of the securities of various entities of Essel Group up to September 30, 2019. As a result, the investors of all the six schemes will get full The amount was not paid on maturity on the basis of Net Asset Value (NAV),” SEBI said in its order.

“No reference was made to the financials and operations of the issuers in the investment plan. The investment decision was based solely on the analysis of the collateral (ZEE),” it added.

SEBI passed its first order in this matter in August last year.

The fund house plans to file an appeal against Roder. “In the same matter, the appeal of Kotak Mahindra Asset Management Company Limited is pending with the Securities Appellate Tribunal,” an AMC spokesperson said.

Others penalized include Kotak Mahindra Trustee Company, and Kotak AMC’s fund managers Lakshmi Iyer, Deepak Agarwal, and Abhishek Bisen, besides compliance officers Jolly Bhatt and Gaurang Shah, who were part of the investment committee, which set up these fixed maturities. Investment decisions related to the schemes were approved. ,

According to the regulator, the trustees and AMCs should have ensured utmost care, due diligence, strong due diligence as such debentures are inherently risky assets as the secondary markets for these securities are generally liquid in nature and wide ranging. Information as well as research. Reports in respect of these entities are not readily available in the market.

first article