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SEBI has sent legal notice to HDFC Mutual Fund to increase FMP maturity

HDFC is one of India's most popular companies, and the Securities and Exchange Board of India (SEBI), Milind Barve, Managing Director of HDFC Mutual Fund, some top executives of the fund house and the HDFC Trustee Company maturity of their fixed maturity plan (FMP) Legal notice has been sent to increase, due to inability to pay Essel Group.


HDFC Mutual said in the exchange filing that the capital market regulator has issued two reasons show notices to the officials and the HDFC Trustee Company on May 31.

Last month, SEBI had issued separate show notices to HDFC Mutual Fund and Kotak Mutual Fund and sought details of their investment conditions in Essel Group's debt securities.

It can not be ascertained that the capital market regulator sent a second legal notice to the officials of Kotak Mutual Fund or not. Kotak has left an email query unanswered. After not paying the repayment by Essel on maturity of the investment, Kotak's FMP had knocked the price.

The regulator had questioned the agreement between Mutual Fund and Essel, who gave the media group time till September to repay the loan.

While mutual funds are defending their decision about this agreement that it was in the interest of investors, SEBI has questioned the legal stance of such a system.

Cash-Strapped founder of Essel, who had borrowed from lenders including mutual funds and non-banking finance companies (NBFC), pledging shares with them to refill collateral after group companies - Zee Enterprises and Dish TV shares. Failed in - crashed at the end of January. Mutual funds, which did not sell the shares pledged at that time, because it could further reduce their value, to pay the money to Essel till September 30.

While at least eight fund houses can keep Essel's papers in different schemes, SEBI sent show-cause notices to two fund houses because their FMP came for maturity.

HDFC Mutual Fund has given the unit holders the option of rolling over on investment for 380 days instead of redeeming them in mid-April.

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