{"id":109393,"date":"2023-09-08T14:19:50","date_gmt":"2023-09-08T08:49:50","guid":{"rendered":"https:\/\/tradebrains.in\/features\/?p=109393"},"modified":"2023-09-08T14:19:55","modified_gmt":"2023-09-08T08:49:55","slug":"sebi-disposes-adjudication-on-alleged-violation-of-mutual-fund-norms-by-lic","status":"publish","type":"post","link":"https:\/\/tradebrains.in\/features\/sebi-disposes-adjudication-on-alleged-violation-of-mutual-fund-norms-by-lic\/","title":{"rendered":"SEBI Disposes Adjudication on Alleged Violation of Mutual Fund Norms by LIC"},"content":{"rendered":"<div class=\"trade-content_2\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-3203317491\"><p><a href=\"https:\/\/tradebrains.in\/get\/telegram\/\"><img decoding=\"async\" class=\"alignnone wp-image-101992\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2023\/01\/telegram-channel-300x119.png\" alt=\"\" width=\"148\" height=\"59\" \/><\/a> <a href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN3Epgswxc--Aw?hl=en-IN&amp;gl=IN&amp;ceid=IN%3Aen\"><img decoding=\"async\" class=\"alignnone wp-image-123430\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png\" alt=\"follow-on-google-news\" width=\"222\" height=\"61\" srcset=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png 300w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-150x41.png 150w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news.png 468w\" sizes=\"(max-width: 222px) 100vw, 222px\" \/><\/a><\/p>\n<\/div><p>SEBI on Thursday disposed of adjudication proceedings against state-owned LIC with respect to alleged violations of mutual fund norms. The case pertained to the insurer&#8217;s shareholding in IDBI Mutual Fund.<\/p><div class=\"trade-content_7\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-1562721714\"><!-- Composite Start --> \r\n <div id=\"M923760ScriptRootC1549812\"> \r\n <\/div> \r\n <script src=\"https:\/\/jsc.mgid.com\/t\/r\/tradebrains.in.1549812.js\" async> \r\n <\/script> \r\n <!-- Composite End --><\/div><p>In a 12-page order, SEBI said the alleged violation on part of <strong><a href=\"https:\/\/portal.tradebrains.in\/stock\/LICHSGFIN\/consolidated\" target=\"_blank\" rel=\"noreferrer noopener\">LIC<\/a><\/strong> is to be viewed in the context of the efforts taken by it to complete the merger of IDBI Mutual Fund with LIC Mutual Fund, and dispose of the adjudication proceedings. The regulator had conducted an examination in the matter of alleged non-compliance of MF (Mutual Fund) regulations by LIC with a focus to ascertain if there was any violation of the rules.<\/p><p>During the course of examination, the regulator observed that IDBI Bank is the sponsor of IDBI Mutual Fund and directly holds 66.67% and 33.33% equity stake through IDBI Capital Markets &amp; Securities in IDBI AMC, respectively.<\/p><p>Also, IDBI Bank holds 100% stake in IDBI MF Trustee Company Ltd. Thereafter, SEBI issued a show cause notice to LIC on May 31, 2023 for the alleged violations. It was further observed that LIC acquired majority stake of 51% in IDBI Bank on January 21, 2019 by way of preferential allotment of equity shares.<\/p><div class=\"trade-content_5\" id=\"trade-3531380861\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_2_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"7925020301\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div><p>Pursuant to this, since LIC held more than 10% of the shareholding and had voting rights in the AMC and the trustee company of IDBI MF, it was allegedly in violation of MF rules. As per SEBI, the norms prohibit holding of 10% or more of the shareholding or voting rights in an Asset Management Company (AMC) or the trustee company of any other mutual fund by a sponsor of a mutual fund, its associate or group company including the AMC of the fund.<\/p><p>&#8220;I note that the noticee (LIC) with the intention to comply with the provisions had made an application to SEBI within the stipulated time, i.e. on December 5, 2019, but since necessary regulatory approvals could not be obtained, the noticee had to explore other available options wherein it had opted for the acquisition of schemes of IDBI Mutual Fund by LIC Mutual Fund.<\/p><p>&#8220;Further, I also note that there are various correspondence exchanged between SEBI and the noticee wherein the noticee had sought extension of time to complete the process of merger and file necessary compliance reports,&#8221; SEBI&#8217;s Adjudicating Officer Biju S said in the order.<\/p><p>SEBI had granted time till August 14, 2023 to comply with the process of the merger of IDBI Mutual Fund with LIC Mutual Fund. The regulator said it was kept informed of the developments on the IDBI MF-LIC MF merger by LIC on regular intervals. Also, SEBI had granted no objection for the merger of schemes of IDBI MF with LIC MF and had advised the noticee to submit the compliance report within three months.<\/p><p>Besides, LIC had submitted the compliance report to the regulator within the stipulated time. Hence, the alleged violation on part of LIC is to be viewed in the context of the efforts taken by the noticee to complete the merger of IDBI Mutual Fund with LIC Mutual Fund, SEBI said in the order. In view of the above observations, the adjudication proceedings initiated against the noticee vide show cause notice dated May 31, 2023 is disposed of without imposition of any monetary penalty, it added.<\/p><div class=\"trade-after-content\" id=\"trade-3915434955\"><div id=\"taboola-below-article-thumbnails\"><\/div>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({\r\n    mode: 'alternating-thumbnails-a',\r\n    container: 'taboola-below-article-thumbnails',\r\n    placement: 'Below Article Thumbnails',\r\n    target_type: 'mix'\r\n  });\r\n<\/script>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({flush: true});\r\n<\/script><\/div>","protected":false},"excerpt":{"rendered":"<p>SEBI on Thursday disposed of adjudication proceedings against state-owned LIC with respect to alleged violations of mutual fund norms. The case pertained to the insurer&#8217;s shareholding in IDBI Mutual Fund. In a 12-page order, SEBI said the alleged violation on part of LIC is to be viewed in the context of the efforts taken by [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":94946,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1696,31],"tags":[],"class_list":["post-109393","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-action","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.5 (Yoast SEO v25.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>SEBI Disposes Adjudication on Alleged Violation of Mutual Fund Norms by LIC - Trade Brains Features<\/title>\n<meta name=\"description\" content=\"SEBI on Thursday disposed of adjudication proceedings against state-owned LIC with respect to alleged violations of mutual fund norms. 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