Winning Bizness Desk

Mumbai. Market Regulator SEBI has been investigating Nippon Mutual Fund and Yes Bank in case of misappropriation of investors' money and according to the sources, its decision can come soon. This matter dates back in between 2016 to 2019 when it used to be Reliance Nippon Mutual Fund. once owned by Anil Ambani's company. In October 2019, Japan's Nippon Life took ownership after buying Anil Ambani's 75 per cent stake in it. Nippon had invested investors' money between 2016 and 2019 in Yes Bank's Rs 8,415 crore Tier-1 bonds. At that time other fund houses including Kotak Mahindra, Franklin also invested. However, Nippon put in the maximum amount of 20 per cent.

7th largest foreign-owned fund house

Nippon India's asset under management i.e. the total amount of investors till December 2022 was Rs 2.90 lakh crore. It is the seventh largest foreign-owned fund house in the country. A Nippon spokesperson said the company had informed the stock exchange about this in April last year and is cooperating with the regulator. Notably, in 2020, Yes Bank was on the verge of sinking. At that time, the Reserve Bank of India (RBI) saved the bank from bankruptcy by forming a group of many investors. However, the bond that was there was written off. The interest rate on the bonds was very high. There was a condition that if the bank went bankrupt, the bond investment could be written off. In this matter the bond holders have also filed a case in the court. Yes Bank had given loans to other companies of Anil Ambani.

What SEBI is probing ?

SEBI is probing whether Yes Bank reinvested Nippon's investment back in Anil Ambani's companies? SEBI rules that the main parent company of fund houses cannot use investors' money. If the allegations are found true in the investigation, then present and former officials of Nippon and Yes Bank will be fined. Also, trading in the stock market may be banned. Sandeep Sikka, the present CEO of Nippon, may also face fine in this case as he has been the CEO since 2009.