Investors in this MF lost over ₹1,800 crore, SEBI reveals amid probe

Investors in certain schemes of the erstwhile Reliance Mutual Fund, now known as Nippon Life India Mutual Fund, have incurred cumulative losses of nearly ₹1,830 crore following the fund house’s decision to invest in AT-1 bonds of YES Bank. These bonds were eventually written down, according to details from a show-cause notice issued by SEBI in August 2024, as reported by Moneycontrol.

The AT-1 bonds, a form of debt instrument issued by banks, were part of a series of investments that saw the fund house gain ₹88.60 crore in management fees. SEBI’s notice raised concerns about a potential quid pro quo arrangement with YES Bank, suggesting improper benefits exchanged between the two entities.

Nippon Life India MF acknowledged receiving the notice but did not disclose specific allegations or the details of the probe. According to the regulator, the asset management company had incurred excess expenses on several of its schemes, and the trustee failed to ensure regulatory compliance.

The show-cause notice outlined possible actions, including disgorgement of the fees earned and debarment for “an appropriate period,” the Moneycontrol report added