SEBI probe into investments between Nippon Mutual Fund, Yes Bank: Report

Mumbai dated 19

Sources say that capital market regulator Securities and Exchange Board of India (SEBI) has started an investigation on suspicion of misappropriation of investors' money in the investments made between 2016 and 2019 between Nippon India Mutual Fund, the largest foreign-owned fund in the country, and Yash Bank.

At a time when the parent company of the mutual fund was owned by the Anil Dhirubhai Ambani group. After Yash Bank was acquired by the Central Bank in 2020, it was sold to a consortium of banks. SEBI is investigating whether Nippon Mutual Fund, then known as Reliance Mutual Fund, made a deal to invest in Yash Bank's perpetual bonds in return for its investment in securities of Anil Ambani group companies or not? Of course, there is no official support in this matter yet.

As per SEBI norms, the parent of a mutual fund cannot directly or indirectly obtain investors' money for such investment. If the result of SEBI's investigation is against the fund, its officers or the bank, then in this case action may be taken including restrictions on access to the capital market, restrictions on remaining active, along with penalties.

Sources believe that the current owner of the fund, Nippon India, as well as the previous owner can be held responsible under such circumstances.

Notably, Nippon India, a unit of Nippon Life Insurance Company, became the owner of the mutual fund by acquiring 75 percent holding in Reliance Asset Management Company in October 2019. These transactions are said to be being investigated from a date prior to the transfer of ownership. Of course, the final decision is likely to be taken after the completion of the investigation.