Sebi Settles Rs 5 Crore Case with Invesco India, CEO, and Others for Regulatory Violation

In its show cause notice, Sebi alleged that there was no clear segregation of activities between portfolio management and mutual fund activities of Invesco Asset Management India Pvt Ltd IAMI.

Invesco Asset Management India, its CEO Saurabh Nanavati and four others on Wednesday settled with markets regulator Sebi a case on alleged non-segregation between the mutual fund activities and portfolio management activities of the company after payment of nearly Rs 5 crore.

The four others were Sujoy Das, Nitish Sikand, Krishna Cheemalapati and Suresh Jakhotiya.

The order came after the six entities filed settlement applications with the Sebi in October 2023, proposing to settle the pending proceedings through a settlement order ''without admitting or denying the findings of fact and conclusions of law''.

After the six entities together remitted Rs 4.98 crore, Sebi passed a settlement order, saying ''the instant proceedings initiated against the applicants for the...violations, vide show cause notice dated August 9, 2023, are disposed of ''. In its show cause notice, Sebi alleged that there was no clear segregation of activities between portfolio management and mutual fund activities of Invesco Asset Management India Pvt Ltd (IAMI). ''PMS arm of IAMI had not maintained an arms-length relationship with Invesco Mutual Fund arm by clearly segregating its activities as a portfolio manager/investment adviser from mutual fund activity,'' Sebi noted.

Also, it was alleged that there was no adequate infrastructure, or manpower available with the portfolio manager for discharging the activities of a portfolio manager. Further, Invesco Asset Management India and its key managerial personnel have allegedly failed to ensure that investments are done to achieve the objectives of the scheme and in the interest of the unitholders in certain investments.

Through such acts, the entities allegedly violated the provisions of the mutual funds rule, portfolio managers norm, investment advisers rule and PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.

Sebi inspected mutual funds and portfolio management services (PMS) activities of Invesco Asset Management (India) Private Limited during October–November 2021.

Earlier this month, IndusInd International Holdings Ltd (IIHL) announced that it will partner with Invesco, and pick up a 60 per cent stake in Invesco Asset Management India. IIHL is a Mauritius-based investment holding company with several investments in banking and financial services firms, including private sector lender IndusInd Bank, while IAMI is the Indian arm of the global investment management firm Invesco having over USD 1.6 trillion in assets under management.

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