Mumbai: In a rare instance, a chief executive officer in his personal capacity has settled probe proceedings in the 2015 redemption crisis, an order on the regulator’s website shows.

Nandkumar Surti, CEO of JP Morgan has settled the case through the so-called consent mechanism at Rs27.2 lakh. Surti, when contacted over the phone, declined to comment.

On Monday Sebi had settled the case against JP Morgan India Pvt. Ltd and JP Morgan Asset Management Company Ltd at Rs8.07 crore.

Surti was under Sebi investigation since December 2015 for violating mutual fund regulations for gating redemptions in two corporate debt schemes or credit schemes following a default in the underlying Amtek Auto debt paper. This was one of the rare instances where a fund house had stopped allowing redemption requests to prevent further slippage in net asset value (NAV) of the two funds.

In February 2016, Surti and JP Morgan applied for settlement through the so-called consent mechanism which allows for settlement without admission of guilt.

On 27 August, 2015, NAVs of two schemes of JP Morgan plunged following a downgrade in one of their underlying companies’ (Amtek Auto Ltd) credit rating. A day later, it limited redemption to 1% of each of the two scheme’s corpus.

The two schemes were JP Morgan India Short Term Income Fund (JSTI) and JP Morgan India Treasury Fund (JTF). As per the fund’s August-end portfolio on its website, JSTI and JTF hold 10.78% and 5.87% of their corpus in Amtek Auto.

Later, JP Morgan AMC informed its investors that it had sold the segregated assets—ones affected due to default by auto component maker. The fund house sold the Amtek Auto paper to a private equity firm at a 15% loss.

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