Sebi penalises individual for flouting regulatory norms in BOI AXA Mutual Fund case

Sebi has imposed a fine of Rs 10 lakh on an individual for flouting market norms in the matter of BOI AXA Mutual Fund. The individual, Shubro Sankha Das Sarma, was the Head of Operations at Bank of India Investment Managers (formerly known as BOI AXA Investment Managers).

The order came after Sebi conducted an thematic inspection of BOI AXA Mutual Fund for the period August 2018 to February 2019. It was done 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.

Post inspection, the regulator initiated adjudication proceedings against Bank of India Investment Managers, Rajesh Chawathe, Sandeep Dasgupta, Jayati Dasgupta, Anurupa Dasgupta, Sarma and Alok Singh for the alleged violation of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.

Out of seven entities, six entities, including Bank of India Investment Managers, settled the case with markets regulator Sebi in December last year.

According to the regulator, Sarma had invested Rs 19 lakh in a mutual fund scheme of BOI AXA Credit Risk Fund (CRF Scheme) during February 2015 to August 2017.

Thereafter, Sarma redeemed his investment in a phased manner after the fund started provisioning for default on debt investments by three companies.

“The ill-gotten gains of Sarma was Rs 46,226. However, I cannot ignore that the said gain is despite the noticee having redeemed his investment prior to the full provisioning of the defaulted securities and also that the total redemption by him involved Rs 20.88 lakh,” Sebi’s Adjudicating Officer Amar Navlani said in the order passed on Tuesday.

Through such acts, Sarma violated the PFUTP norms, it added.

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