SBI Mutual Fund settles proceedings with SEBI, pays over Rs 14 crore towards settlement charges

New Delhi: SBI Mutual Fund has settled proceedings with Sebi by paying over Rs 14 crore towards settlement charges regarding a case of allegedly concealing important facts while dealing in the shares of a company.

The fund house had approached the watchdog with a plea under the settlement regulation "without admitting or denying the findings of fact and conclusions of law".

"The pending proceedings under the Sebi (Intermediaries) Regulations, 2008 for the alleged defaults ... are settled," the regulator said in an order dated 28 September.

Sebi also said that it would not initiate any enforcement action against the applicant for the alleged defaults.
SBI Mutual Fund filed a settlement plea proposing to settle pending proceedings initiated through a show cause notice issued in May, 2013.

Representational image. Reuters.

Representational image. Reuters.

The notice was for alleged violation of PFTUP (Prohibition of Fraudulent and Unfair Trade Practices) rules for fraudulently concealing important facts while dealing in the shares of Padmini Technologies.

It was alleged that the fund house violated code of conduct prescribed for trustees and asset management companies under mutual fund regulations by not exercising due diligence and proper care in conduct of its business.

It was also alleged that there was failure to preserve its records, books of accounts or documents for eight years.
Pending adjudication proceedings, the fund house had offered to settle the case on payment of settlement charges as well as implementing policies to prevent violation of securities norms.

Thereafter, the regulator's high-powered advisory committee recommended the case for settlement, which was also approved by Sebi's panel of whole-time members.

As per the order, the fund house has remitted Rs 14.05 crore towards the settlement charges, besides, Rs 62.04 lakh towards Sebi's Investor Protection and Education Fund.

Further, the markets watchdog said that the fund house has "undertaken that it has implemented enhanced policies and procedures to prevent securities laws violations"

Besides, the fund house has submitted that they would appoint/ retain an independent consultant to review policies and procedures and has arranged to provide enhanced training and education to its employees, Sebi said.


Updated Date: Oct 02, 2018 09:57 AM

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