L&T Mutual Fund and four of its officials have settled a case pertaining to alleged violation of regulatory norms with the Securities and Exchange Board of India (Sebi) by agreeing to pay a sum of over Rs 1.15 crore.
The matter pertains to inter-scheme transfers of L&T Mutual Fund for the period between April 01, 2017 and June 30, 2018.
“L&T Investment Management failed to avoid conflicts of interest in managing the affairs of the schemes and to keep the interest of all unitholders paramount in all matters…” Sebi has said in an order.
The fund house also “failed to ensure that the transfers of investments from one scheme to another scheme were allowed only if such transfers were done at the prevailing market price for quoted instruments on spot basis, and that the securities so transferred should be in conformity with the investment objective of the scheme to which such transfer had been made,” the order further said.
The case was settled under the so-called consent route where an alleged violator can close a pending matter with Sebi without admitting or denying the guilt.
L&T MF agreed to pay Rs 57 lakh, while four of its officials, including CEO Kailash Kulkarni, paid Rs 14.63 lakh each.
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“It was observed that Kulkarni (Applicant no. 2), as the CEO of the AMC, failed to ensure that the mutual fund complied with all the provisions of MF Regulations and the guidelines or circular issued in relation therein and that the investments made by the fund manager(s) are in the interest of the unit holders,” Sebi has stated in the order.
Sebi had issued a show cause notice to the fund house in June 2022. In August 2022, the fund house filed a consent settlement application with the regulator.
In December 2021, HSBC had acquired L&T MF for Rs 3,485 crore. The acquisition was completed in November 2022.
