BOI MF settles 'inter-scheme transfer' case with Sebi, pays Rs 3.93 cr

The fund house along with five individuals pay Rs 3.93 crore for the settlement

The Securities and Exchange Board of India (Sebi) has cleared the one-time settlement application of Bank of India mutual fund (formerly BOI AXA MF) in a case pertaining to inter-scheme transfers in 2018-2019.

The one-time settlement scheme of Sebi allows companies and individuals to settle cases with the regulator by paying a certain amount. They do not have to admit or deny the charges in this settlement process.

According to the regulator, the fund house was found to have violated regulation in 2018-2019 by transferring downgraded debt securities to schemes categorised as low or medium risk funds. The fund house was said to have misvalued securities. "(The company) allegedly failed  to  value securities in accordance with the overarching principles of fair valuations and failed  to  follow  its  own  approved  valuation  policy by  arbitrarily deciding  figure of per day provisioning," the regulator said in the settlement order.

Along with the fund house, Sebi had found the then Chief Executive Officer (CEO) Sandeep Dasgupta, compliance officer Rajesh Chawathe and fund manager Alok Singh to have violated the rules. Dasgupta's wife and daughter were also named in the case.

The BOI MF along with the five individuals have together paid Rs 3.93 crore to the regulator for the settlement. BOI MF paid Rs 1.36 crore. The Chief Executive Officer (CEO) at the time, Sandeep Dasgupta, his wife and his daughter together remitted an amount of Rs 1.72 crore. The then compliance officer Rajesh Chawathe and Alok Singh (fund manager) paid the rest Rs 84.5 lakh.