No pre-IPO placement for HDFC Mutual Fund distributors

The mutual fund house, which manages assets over Rs 3 trillion, had made a private placement of shares worth Rs 1.5 billion to 140 distributors

The Securities and Exchange Board of India (Sebi) has directed HDFC Asset Management Company (AMC) to cancel the shares allotted to distributors ahead of its much-awaited initial public offering (IPO), according to sources. Sebi wants the money repaid to the distributors at the rate of 12 per cent interest per annum.

The mutual fund (MF) house, which manages assets over Rs 3 trillion, had made a private placement of shares worth Rs 1.5 billion to 140 distributors. This had not gone down well with other industry participants as they felt this could compromise distributors' ability to give unbiased advice to their