SEBI has imposed a penalty of Rs 1.5 crore on Karvy Computershare
New Delhi:
Market regulator Securities and Exchange Commission of India (SEBI) on Wednesday imposed a penalty of Rs 1.5 billion on Karvy Computershare (now known as KFin Technologies) for acquiring units shares in the Taurus Mutual Fund on the basis of privileged information, regarding Ballarpur Industries’ default.
The information is available with Karvy as it is the registrar of the issue and share transfer agent or RTA of Taurus Management Company.
By acquiring all the units in the Taurus Liquid Fund and the Taurus Ultra Short-Term Bond Fund in February 2017, Karvy Computershare illegally profited around Rs 1.2 crore, SEBI said in an order row.
Karvy Computershare abused its privileged position as the RTA (Registrar of Shares and Assignment) of Taurus Asset Management.
In a statement, KFin Technologies said the company will review SEBI’s order and decide on next action.
It also said the order relates to an issue of 2017 and related to Karvy Computershare Private Limited (KCPL) when it was part of the first promotion and management team.
KFin Technologies is the successor to where KCPL was merged in 2018. KFin Technologies’ current promoter is General Atlantic, the company added.
In its 56-page article, SEBI said, “announcers’ actions in submitting their redemption application to all units on the date BILT (Ballarpur Industries) defaulted to the return of the commercial paper. made based on privileged information obtained in a capacity such as an RTA, information not yet available to other investors.”
“The announcer’s repurchase of all the units clearly makes it profitable at the price of other investors, who can only redeem the units at NAV (net asset value) after the break. debt,” it added.
The announcer mentioned Karvy Computershare.
The fact that the RTA trades units of the Taurus Mutual Fund has clearly helped it avoid losses, and this exposes other investors to a larger loss than they would have received when the receiver announced the redemption of the shares. units at the following default value, SEBI notes.
