Invesco, one of America’s leading fund management companies, has come under the investigation of financial market regulators spanning multiple jurisdictions for alleged misappropriation of fixed income schemes.

Market regulators SEBI in India, SEC in the US and SFC in Hong Kong, among other global regulators, are conducting an intense probe and looking into emails and other data of the senior employees of Invesco, mainly from India, sources told BusinessLine.

Invesco India asset management company (AMC) has a kitty of over ₹53,747 crore across mutual funds, portfolio services and offshore advisory.

‘Bad paper’ movement

The probe against Invesco started a few months ago after one of the AMC’s Indian fund managers turned a whistleblower and filed complaints in the US, India and with few other jurisdictions. Sources in SEBI say the allegations pertain to Invesco illegally moving ‘bad papers’ in a few fixed income schemes to various jurisdictions to avert potential damages.

It is alleged that an attempt was made to hide bad investments in some of the Indian schemes to other global funds while other schemes still kept buying such bad papers. Invesco’s funds registered in tax haven, Luxembourg, too are under the scanner.

“So far, several senior Invesco officials, including CEO Saurabh Nanavati and chief compliance officer Suresh Kakhotia, have been questioned to understand the norms followed by the AMC. Senior SEBI officials have been visiting Invesco’s Mumbai offices almost daily and 25 laptops of Invesco officials were checked last week,” sources said.

Whistleblower sacked

Even though Invesco is an Atlanta registered company, it acted contrary to its whistleblower policy there and fired the whistleblower in just three to five days after he filed the complaint. Invesco’s officials have told SEBI that the AMC had observed certain transgressions by the whistleblower and were anyway going to sack him.

However, sources said the AMC has not been able to produce any convincing papers or case details regarding the alleged transgressions by the whistleblower that lead to his sacking. In fact, Invesco employees did not cooperate with the regulator in sharing of data and emails that SEBI officials sought for their probe, and casually said the data had been deleted due to a malware attack. Following this, SEBI sought the AMC’s malware policy and summoned a senior technology official from the Atlanta headquarters, who visited India recently to comply with the summons, sources said.

Invesco’s response

When contacted by BusinessLine, a spokesperson for Invesco said, “As is appropriate for a global financial services company, Invesco maintains policies and procedures for investigating allegations of improper conduct received from any source. Invesco always handles such matters in an appropriate manner, consistent with global best practices. This includes global oversight and independent, impartial review.”

“We cooperate with any regulatory inquiries (including any examinations or investigations) in a manner that is transparent and consistent with global best practices. As part of corporate policy, it will be inappropriate for us to divulge any individual or employment details of any of our employees. Our portfolios and business remain unaffected. All Invesco funds and investment strategies operate under our global risk management framework and invest according to the parameters and guidelines set out in the relevant prospectus or other governing document,” the spokesperson added.