Whistleblower files complaint against Invesco mutual fund

A whistleblower has filed a complaint against Invesco Asset Management (India), alleging irregularities in the management of its fixed income schemes.

The complaint has been filed with the Securities and Exchange Board of India (Sebi) as well as with the US Securities and Exchange Commission (US SEC). The complainant has also filed a case with the Bombay High Court, which is currently at a pre-admission stage, according to two people familiar with the matter.

The whistleblower worked as a fund manager with the fund house and was allegedly sacked a few days after the complaint was filed, said one of the persons. Sebi is said to be examining the matter internally and has reached out to the fund house on the matter, said a source. Business Standard could not, however, ascertain the nature of the alleged irregularities.

In an email response, Invesco Asset Management (India) said it maintains policies and procedures for investigating allegations of improper conduct received from any source and always handles such matters in a manner consistent with global best practices.

“Invesco seeks to maintain excellent relations with all our regulators. We cooperate with any regulatory inquiries (including any examinations or investigations) in a manner that is transparent and consistent with global best practices,” the fund house said, replying to a Business Standard query on whether the regulatory authorities, Sebi or the US SEC, had reached out to it on the matter.

The fund house, however, did not divulge more details on the alleged irregularities.

An email sent to Sebi did not elicit a response.

Globally, Invesco has put in place a whistleblower policy that encourages complaints regarding violation of its code of conduct, violations of laws, questionable accounting matters, internal accounting controls, auditing matters, breaches of fiduciary duty, or rules at Invesco to be reported via a toll free number or a separate whistleblower hotline website.

“Invesco holds itself and its employees to the highest standards of honest and ethical conduct, and strives to ensure that all activity conducted by, or on behalf of, the firm and its subsidiaries is in compliance with applicable laws, rules and regulations. Employees of Invesco and its subsidiaries are affirmatively required to report possible violations of the Invesco Code of Conduct,” the asset manager’s whistleblower website states.

Currently, the fund house in consortium with Warburg Pincus and Kedaara Capital is in the race to acquire IDFC Mutual Fund, according to reports. A consortium of Bandhan Group, GIC, and ChrysCapital is also in the race to acquire IDFC MF.

“Regulations in the past two years have gone a long way in mitigating risks for debt investors. But problems can crop up if a fund house gets too aggressive and aims for significantly higher returns over others,” said a debt fund manager from another fund house, on condition of anonymity.