InvestorQ : Why SEBI has barded Kotak AMC from the FMP launch for six months?
ramya Bhaskaran made post

Why SEBI has barded Kotak AMC from the FMP launch for six months?

Isha Tharwani answered.
11 months ago
Recently, SEBI has barred Kotak Mahindra Asset Management Company from launching any new fixed maturity plan (FMP) scheme for the next six months. SEBI observed that the AMC delayed payments to its unitholders of six FMPs in 2019, and consequently it also imposed a fine of Rs 50 lakh on the said AMC.

So, what really happened is the six FMP schemes of fund house were due for redemption around April-May 2019, and it failed to pay redemption value to its investors. That is mainly because the company invested in the shares of Essel Group of Companies, and these companies defaulted in their payments.

So, the schemes that were due for maturity in April-May were redeemed in September. However, this wasn’t the real issue. The fund also violated the terms and regulations of SEBI during this period. They broke several regulations which are specifically mentioned in SEBI guidelines.

Kotak AMC has also been directed to refund a part of the investment management and advisory fees collected from the unitholders of the six FMP schemes. SEBI also directed the AMC to pay the penalty of Rs 50 lakh within 45 days, of which 7 days have been elapsed till now.