HDFC MF trustees face SEBI adjudication proceedings

Fund house invested in debt instruments of Essel Group The Securities and Exchange Board of India (SEBI) has initiated adjudication proceedings against the trustees of HDFC Mutual Fund for the fund house’s investments in the debt instruments of Essel Group. The fund house, in a statement to the stock exchanges on Monday, said the trustees received two show cause notices from the capital markets regulator on May 31. Incidentally, this is not the first time that the asset management company has received a show cause notice from the SEBI in the matter of investments in Essel Group. On May 10, it had received two show cause notices in the matter. “... SEBI has issued two additional show cause notices initiating adjudication proceedings against HDFC Trustee Company Limited , i.e. the trustee company of the HDFC Mutual Fund, and our managing director, Milind Barve and few other officials of the company on May 31, 2019...” the asset management company said in a statement issued to the stock exchanges on Monday. We are working with our legal advisers and are in the process of responding to the said adjudication notice, added the statement. Fund houses, which have an exposure towards the troubled Essel Group, have decided to give the corporate entity time until September to meet its payment obligations after it said that it was facing liquidity issues. In April, HDFC MF said that the decision of giving Essel Group promoters more time to complete the strategic sale process was taken in the best interest of investors, who could stand a good chance of higher or complete recovery against the debt exposure.