SEBI issues show-cause notice to HDFC MF, Kotak MF, questions pact with Essel Group
14/05/2019 17:14
SEBI goes through the details of the agreements between Essel Group and two mutual funds those were given time till September to repay loans. This shows that the investors in mutual fund schemes weren’t paid in full when they attained maturity.

As per the report, the SEBI has sent notice to HDFC Mutual Fund and Kotak Mutual Fund in a different show-cause in the terms of the investment of both the funds in Essel Group debt securities.

The SEBI has questioned any pact between various fund houses and Essel Group for the first time after the shares of Essel owned, Zee and Dish plunged in January.

The report further says that the reason SEBI sent notices to the HDFC and Kotak Mutual Funds that the subscribers to the fixed maturity plans (FMPs) weren’t paid in full, although at least nine fund houses could be holding Essel papers in various schemes.

The agreement mentioned that the money was supposed to be paid at the time of maturity and if it is not, the fund houses should not have signed a standstill agreement.