Fairfax Financial Holdings settle case with Sebi; pays Rs 29.25 L charges

Canadian billionaire Prem Watsa-backed Fairfax Financial Holdings Ltd (FFHL) has settled with Sebi a case pertaining to alleged violation of mutual fund regulations.

Fairfax paid Rs 29.25 lakh as settlement charges to the regulator.

The order came after Fairfax proposed to settle the instant proceedings through a settlement order "without admitting or denying the findings of fact and conclusions of law".

"The instant proceedings initiated against the applicant (Fairfax) vide show cause notice dated October 8, 2021 is disposed of," Sebi's Whole Time Member S K Mohanty said in the settlement order passed on Wednesday.

In March 2018, Sebi amended the MF (Mutual Fund) regulation.

Under the rules, the regulator does not allow any entity to hold more than a 10 per cent stake in more than one mutual fund house. It also provided one-year time to sponsors of the mutual funds to comply with norms for shareholding and governance of mutual funds, if they, inadvertently acquire shares or voting rights due to merger or acquisition.

It was alleged that Fairfax was not compliant with the provisions of mutual fund norms even after completion of the one-year grace period.

Thereafter, a show cause notice was issued on October 8, 2021 for the alleged violation of mutual funds regulations.

The settlement application was filed before Sebi on December 13, 2022 and the High Powered Advisory Committee of the regulator on December 27, 2022 recommended that the case be settled upon payment of the settlement charges.

After Fairfax paid the respective amount of Rs 29.25 lakh, Sebi issued the settlement order.