The Securities and Exchange Board of India (Sebi) has fined HSBC Asset Management ₹5 lakh after re-evaluating a previous decision that had cleared the asset manager of wrongdoing.
The case involves actions by L&T Asset Management, which HSBC Group acquired in May last year and merged with its own asset management company in October 2023.
Sebi issued a new show cause notice on November 6, 2023, following an inspection. Sebi found that asset management companies must keep detailed records supporting each investment decision, including data, facts, and opinions. However, discrepancies were found in this case.
Initially, on August 23, 2023, Sebi’s adjudicating officer dismissed the case against L&T Mutual Fund, stating that there were no proven violations. However, Sebi whole-time member Kamlesh Varshney noted that the officer had wrongly cleared L&T Mutual Fund without sufficient evidence to support the claim that it was actively tracking investee companies and maintaining necessary records.
Sebi has now penalized HSBC AMC for these shortcomings.
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