HSBC Asset Management (India) Pvt Ltd and four of its trustees have settled with the market regulator by paying Rs 23.92 lakh jointly, after the regulator issued a showcause notice to them following investigations into the use of funds of one scheme by another scheme of the mutual fund.
Jasmine Batliwala, Nani Javeri, Ho Wai Fun and Dr TC Nair were the trustees named in the settlement order issued by the Securities and Exchange Board of India (SEBI) on May 27.
According to the order, the showcause notice alleged that HSBC AMC failed to have appropriate controls in place to prevent the use of funds of one scheme by another scheme of the mutual fund and thereby violated provisions under the Mutual Fund Regulations and a Sebi circular dated December 10, 2021.
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The notice also alleged that the trustees had failed to have appropriate controls in place to prevent the same.
Pending adjudication proceedings, the AMC and the trustees filed settlement applications proposing to settle the proceedings initiated against them, without admitting or denying the observations of the market regulator.
The applications were placed before the internal committee of SEBI on February 13, 2024. The committee noted that the applicants stated that they have employed corrective measures subsequent to the alleged default.
The committee communicated the monetary settlement terms to the entities and asked for an undertaking from the entities that the settlement amount will not be charged to the unitholders.
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After the entities submitted their settlement terms, the applications were placed before the High-Powered Advisory Committee (HPAC) on March 4, 2024.
The notice of demand was issued to the applicants via an email dated May 10, 2024. On the same day, the applicants informed the regulator about the remittance of the settlement amount.
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