Sebi penalises HSBC AMC as it revisits earlier order

Mumbai: The Securities and Exchange Board of India (Sebi) reopened a case related to HSBC Asset Management and imposed a penalty of ₹5 lakh on it, after it found that an earlier order passed last year exonerating the asset manager was erroneous.

Sebi's order relates to actions by L&T asset management company, which was acquired by HSBC Group last year in May and was merged with its asset management company in October 2023.

Sebi issued a fresh show cause notice on November 6, 2023, based on the findings of an inspection.

It had noticed that asset management companies were required to maintain records in support of each investment dcision which would include the data, fact and opinion leading to that decision. But, in this case, anomalies were observed.

In an order on August 23, 2023, Sebi's adjudicating officer disposed of the case against the fund house saying the violations charged against it were not established. "The AO (adjudication order) had erred in exonerating the noticee (L&T Mutual Fund) merely relying on the submission that the noticee was actively tracking the investee companies and that it has maintained data, facts and opinion leading to its each investment decisions, when the same had not got support of any evidence," Sebi whole time member Kamlesh Varshney said in his order.