Markets regulator Securities and Exchange Board of India (SEBI) on Wednesday imposed a penalty of Rs 1.5 crore on Karvy Computershare (at the moment often known as KFin Technologies) for redeeming its items in Taurus Mutual Fund on the premise of privileged data, pertaining to Ballarpur Industries default.
The data was obtainable with Karvy because it was the registrar to situation and share switch agent or RTA of Taurus Management Company.
By redeeming all items in Taurus Liquid Fund and Taurus Ultra Short Term Bond Fund in February 2017, Karvy Computershare made illegal acquire of about Rs 1.2 crore, SEBI mentioned in an order.
Karvy Computershare misused its privileged place as RTA (Registrar to Issue and Share Transfer Agent) of Taurus Asset Management Company.
In an announcement, KFin Technologies mentioned the corporate will look at the order of SEBI and determine the additional plan of action.
It additional mentioned the order pertains to a matter of 2017 and associated to Karvy Computershare Private Limited (KCPL) when it was a part of the erstwhile promoter group and administration.
KFin Technologies is the successor entity the place KCPL obtained merged in 2018. The current promoter of KFin Technologies is General Atlantic, the corporate added.
In its 56-page prder, SEBI mentioned, “the actions of the noticee in putting in its redemption application for all units on the day of default by BILT (Ballarpur Industries) on commercial paper repayments were carried out based on privileged information garnered in its capacity as RTA, information which was not yet available to other investors.”
“The redemption of all units by the noticee clearly caused it to make gains at the cost of other investors who could only redeem units at the post-default NAV (net asset value),” it added.
The noticee refers to Karvy Computershare.
The dealing in items of Taurus Mutual Fund by the RTA clearly helped it keep away from losses and which induced different traders to undergo losses bigger than they’d have had the noticee redeemed items at post-default values, SEBI famous.