Investors faced losses of ₹1,830 crore due to the write-down of YES Bank’s AT-1 bonds in Nippon Life India Mutual Fund (formerly Reliance Mutual Fund). SEBI is investigating a possible improper agreement between the mutual fund and YES Bank, suggesting they exchanged benefits.
Key points from the SEBI probe:
- Investment in AT-1 Bonds: The mutual fund invested in YES Bank’s AT-1 bonds, which were later written down, leading to major investor losses.
- Management Fees: The mutual fund earned ₹88.60 crore in management fees from these transactions.
- Regulatory Compliance: SEBI raised concerns about excess expenses on several schemes and the trustee’s failure to ensure regulatory compliance.
- Broader Investigation: This probe is part of a larger investigation involving multiple agencies, including the CBI. They are examining investments worth ₹2,850 crore made by companies previously owned by Reliance Capital in YES Bank’s AT-1 bonds.
- Additional Investments: The mutual fund is also under scrutiny for investing ₹950 crore in non-convertible debentures (NCDs) of Morgan Credit Private Limited, linked to the Rana Kapoor family.
Nippon Life India MF has acknowledged receiving SEBI’s notice but has not disclosed specific allegations or details of the probe.
