HSBC Asset Management, others settle mutual fund rule violation case

HSBC Asset Management (India), its independent directors Jasmine Batliwala and Nani Javeri, and two others have paid market regulator Sebi nearly Rs 24 lakh to settle a case related to an alleged violation of mutual fund rules in the matter of HSBC Mutual Fund.

The settlement fee was paid by the entities on a joint and several liability basis.

Also, they (HSBC Asset Management India, Jasmine Batliwala, Nani Javeri, Ho Wai Fun and TC Nair) had submitted an undertaking that the settlement amount will not be borne by or charged to the unitholder(s) of the mutual fund schemes of HSBC Mutual Fund, Sebi said in an order on Monday.

The order came after the noticees proposed to settle the proceedings initiated against them vide a show cause notice dated August 4, 2023, "without admitting or denying the observations of Sebi" in the notice.

The Securities and Exchange Board of India (Sebi) had initiated adjudication proceedings against noticees (HSBC Asset Management India, Batliwala, Javeri, Ho Wai Fun and Nair) for the alleged violation of Sebi's Mutual Fund (MF) regulations.

According to the Sebi order, the noticees 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 MF norms.

Further, a common show cause notice was issued by Sebi to the noticees on August 4, 2023.

Thereafter, the noticees filed settlement applications with the regulator in terms of the provisions of Sebi (Settlement Proceedings) regulations. Pursuant to the Sebi's internal committee meeting, the applicants submitted their revised settlement terms, wherein they proposed to offer Rs 23.92 lakh to be paid on joint and several liability basis, and submitted an undertaking that the revised settlement amount will not be borne by or charged to the unitholder(s) of the mutual fund schemes of HSBC Mutual Fund.

Accordingly, the applicants on May 10, 2024 informed about the remittance of the settlement amount and the same had been confirmed by Sebi.

"The instant adjudication proceedings initiated against the noticees viz., HSBC Asset Management (India) Pvt Ltd, Jasmine Batliwala, Nani Javeri, Ho Wai Fun, T C Nair vide aforesaid show cause notice dated August 04, 2023, are hereby disposed of," Sebi's adjudicating officer Amar Navlani said in the order.