Bank of India Mutual Fund, CEO & his family settle case with Sebi for Rs 3.08 crore

Mumbai: Bank of India Investment Managers, formerly known as BOI AXA Investment Managers, its chief executive Sandeep Dasgupta, his wife Jayati Dasgupta and daughter Anurupa Dasgupta settled violations of mutual fund rules with Sebi by paying a total fine of 3.08 crore.

The regulator alleged that Dasgupta, his wife and his daughter withdrew their entire investment from the fund to their advantage while he was in possession of all unpublished material information about the valuation of the defaulted securities.

Sebi alleged that Dasgupta failed to ensure that the asset management company (AMC) complied with all the provisions of mutual fund regulations.

The regulator conducted a thematic inspection of BOI AXA Mutual Fund for the period August 1, 2018, to February 28, 2019, to verify the books of accounts, records and other documents pertaining to the mutual fund with respect to inter scheme transfer (IST) and valuation of downgraded debt securities.

Based on Sebi’s findings it issued a show cause notice to the fund house and to some of its senior officials.

The regulator alleged that the fund house violated its mutual fund rules by doing inter-scheme transfers which resulted in the transfer of high-risk securities to schemes categorised as low/medium risk, which did not conform to their investment objectives.

Sebi also charged the fund house with failure to value securities in accordance with the overarching principles of fair valuations and failed to follow its own approved valuation policy by arbitrarily deciding the figure of per-day provisioning and continued with per-day provisioning ignoring material events and major developments regarding the filing of recovery proceeding against the issuer with NCLT(National Company Law Tribunal), valuation committee met after delay, failed to meet immediately to review related developments.
The regulator also alleged that the fund manager Alok Singh too withdrew his entire holding based on unpublished information about the valuation of defaulted securities to his advantage.

The regulator said Rajesh Chawathe, compliance officer of the fund house failed to monitor compliance with Sebi rules by the mutual fund.

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