Nippon India Mutual Fund, formerly known as Reliance Mutual Fund, has been booked by the Central Bureau of Investigation (CBI) for investing Rs 950 crore in non-convertible debentures (NCDs) of Rana Kapoor family-owned Morgan Credit Pvt Ltd. Is under investigation.
The CBI investigation is part of a larger multi-agency investigation. The Securities and Exchange Board of India (SEBI) is also involved in this investigation. Various agencies are probing the cumulative investment of around Rs 2,850 crore by companies formerly owned by Reliance Capital in AT1 bonds issued by Yes Bank. This transaction took place at a time when Reliance Capital Asset Management Company was the parent company of Nippon. Due to which the investigation has been extended to Reliance Home Finance, Reliance Commercial Finance. In September 2019, Reliance Mutual Fund was renamed as Nippon India Mutual Fund. This entire chapter covers the period from December 2016 to March 2020. When certain transactions between companies owned by Reliance Capital and Yes Bank came to the notice of the market regulator. The new chapter deals with investment documents and information made by fund houses in April 2018. The investigating agency had sought documents and information in this regard on December 21. Meanwhile, in August this year the capital markets watchdog sent show cause notices to Anil Ambani, his son Jai Anmol Ambani, Rana Kapoor and top executives of asset management company Nippon India MF and other companies. It also includes Nippon India MF CEO Sandeep Sikka, Fixed Income CIO Amit Tripathi, Chief Officer-Operations and Customer Service Milind Nesarikar.
The show cause notice issued by SEBI based on the investigation alleged that there was a joint investment of Rs 2,850 crore by Reliance Mutual Fund and the company then known as Reliance Capital in AT1 bonds issued by Yes Bank. A part of these investments were made in NCDs issued by Morgan Credit Pvt. Ltd. According to SEBI, this was a kind of transaction arrangement. Because in January 2017, Yes Bank had provided a facility of Rs 500 crore to Reliance Home Finance. Then this happened again in October 2017.
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