Mutual fund company HSBC Asset Management’s troubles have increased. Market regulator SEBI has re-opened an old case against it and imposed a penalty of Rs 5 lakh.
SEBI Re-opened The Case
The market regulator had earlier issued an order in the related case. Still, now it says that the order to restore the rights of the asset management company in the old order is erroneous. The regulator has re-opened the case to correct the mistake of the previous order and imposed a penalty of Rs 5 lakh on the company.
Case Of Acquisition Of L&T AMC
This action of SEBI is related to the acquisition of L&T Asset Management Company by HSBC Group. HSBC Group acquired L&T Asset Management Company in May last year and merged it with its asset management company HSBC AMC in October 2023.
This Provision Has Been Violated
According to the current rules, asset management companies must maintain records proving all investment decisions. Those records include data, facts, and opinions that are responsible for deciding. Thus, asset management companies must keep records of the data, facts, and opinions on which they make investment decisions. Irregularities related to this provision have been found in the case of HSBC AMC’s acquisition of L&T AMC.
The Case Was Over Last Year
SEBI issued a fresh show-cause notice in the case on November 6, 2023. Earlier, on August 23 last year, SEBI ended the case against HSBC Asset Management Company, saying that the allegations against it were not proven. However, that order has now been reversed, and a penalty has been imposed on the company.
