The Securities and Exchange Board of India (Sebi) has banned Kotak Mahindra Asset Management Company from launching fixed maturity plan (FMP) schemes for six months.
The action came as Kotak AMC delayed payment of full proceeds to investors of six FMP schemes run by the AMC. Sebi has also imposed a penalty of Rs 50 lakh on the mutual fund, which is to be paid within 45 days. It has also asked the AMC to refund part of the investment management and advisory fees collected from unitholders of six FMP schemes with 15 per cent interest per annum, to be calculated from the date of FMP maturity to the date of actual payment.
The case pertains to six schemes that were due for maturity in April-May 2019.
The fund house had failed to make full redemptions at the time of maturities because these schemes had invested in Essel group and other firms, which had defaulted on their payments.