Mumbai: The Securities and Exchange Board of India (Sebi) has issued a show-cause notice to the local unit of Invesco, a US-based asset manager, for possible violations of mutual fund rules that potentially risked investor money, people familiar with the development told ET. Invesco is reportedly found to have shuffled securities between schemes in alleged violation of rules.
However, the company is said to have defended its actions before the capital-markets regulator, arguing that investors did not lose money because of its actions as it shifted loss-making bonds of an eventually defaulting non-bank lender onto its own balance sheet to prevent erosion in investor wealth.
Sebi’s notice reportedly served a couple of months ago, alleges a lack of segregation between the mutual fund and portfolio management service activities, questionable inter-scheme transfer of securities compromising investor interests, and the transfer of certain securities to offshore funds ahead of potential downgrades, two sources aware of the development said.
Invesco responded to the regulator’s notice last month, one of the persons cited above said.
Emails sent to Invesco Asset Management India and Sebi remained unanswered until the publication of this report.
Sebi’s investigation follows complaints filed by Abhishek Bandiwdekar, a former fund manager at Invesco, who raised concerns about the mismanagement of schemes within the fund house. Bandiwdekar, associated with Invesco for more than eight years, acted as a whistleblower, prompting Sebi’s inquiry into alleged breaches of securities laws by Invesco Asset Management India which manages assets worth more than ₹57,000 crore in the country.
‘Questionable’ Deals
The regulator also made allegations of quid-pro-quo deals and asserted that key personnel, including the local unit’s chief executive Saurabh Nanavati and fund managers, such as director and head of fixed income Sujoy Das, were involved in decisions that disadvantaged investors of one fund to accommodate a request from a corporate client. In December 2020, Das moved out of Invesco Asset Management India after a 10-year stint.
