ICICI Prudential Asset Management and its chief Nimesh Shah on Thursday settled a case with the market regulator SEBI in the matter of ICICI Securities public issue for ₹96.76 lakh.

In March this year, ICICI Securities, ICICI Pru AMC's sister concern, came out with an initial public offering for over 7.72 crore shares, with a price band of ₹519-520. Due to poor response, the company was forced to reduce the size of the offer price.

It was then alleged that ICICI Prudential AMC applied for and was allotted about 1.23 crore shares with an investment of ₹640 crore (₹400 crore on the first day and ₹240 crore on the last day of the issue) under five of its schemes.

A SEBI probe was launched into the alleged violation of mutual fund norms over their investments. SEBI then had 'advised’ the mutual fund house to refund about ₹240 crore it had invested on the last day of the IPO of ICICI Securities, along with 15 per cent interest to its five schemes.

Show-cause notice

The regulator on July 11 appointed an adjudicating officer who subsequently issued show-cause notices to them for the alleged violation.

ICICI Pru AMC and Nimesh Shah preferred to settle the issue through consent mechanism, which SEBI has accepted. Accordingly, ICICI Prudential Asset Management has paid ₹89.96 lakh and Shah ₹6.8 lakh towards the settlement fees. Under the settlement mechanism, an entity is allowed to settle the charges by paying a penalty without admission or denial of guilt.

“This settlement order is without prejudice to the right of SEBI to take enforcement actions including initiating or reopening the proceedings against the applicants if any representation made by applicants in the settlement proceedings is subsequently found to be untrue; or applicants breaches any of the clauses conditions of undertakings/ waivers filed during the current settlement proceedings,” SEBI order said.

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