It was alleged that Indiabulls MF did not comply with dividend declaration and distribution procedure. It allegedly did not seek trustee approval and addendum was not published for declaring the dividend at four instances.
Besides, Indiabulls MF was allegedly not valuing the same security consistently across schemes, and in several instances single security was valued at different prices in different schemes.
To check the possible violation of Sebi's Mutual Fund regulation, the regulator conducted an inspection of Indiabulls MF from February 2013 to March 2014.
In an order dated June 16, Sebi has disposed of a case against Indiabulls Mutual Fund, Indiabulls Asset Management Company and Indiabulls Trustee Company.
"Imposing penalty on mutual fund... Would be counterproductive as unit holders of mutual fund would have to bear the penalty without any lapse on their part.
"I find that there are observations made in inspection report with respect to procedural lapses while declaration and distribution of dividend in four instances, and noticees have taken rectifying steps for proper compliance in future," Sebi Adjudicating Officer Nagendraa Parakh said.
With respect to valuation of securities and calculation of net asset value (NAV), Sebi said that the noticees had followed market wide practice and abided to guidance issued by industry body Association of mutual funds in India (Amfi) in this regard.