SAT partly allows Kotak AMC appeal in Essel FMP case

The Securities Appellate Tribunal (SAT) on Friday partly allowed an appeal by Kotak Mahindra Asset Management Co. against a 2021 order by the Securities and Exchange Board of India (Sebi), setting aside the regulator’s order to disgorge management and advisory fees linked to the investments made through six fixed maturity plans (FMPs).

- Apoorva Ajith

SAT, however, upheld Sebi’s findings of regulatory violations by Kotak AMC in the same investments, and dismissed a separate appeal challenging penalties imposed on the company and its senior executives. Besides, SAT also granted an eight-week extension of the stay on penalties to allow the appellants to approach the Supreme Court.

“There is no impact on the existing schemes or unit holders of KMAMC,” a Kotak AMC spokesperson said. “Hon'ble SAT has granted eight weeks' time to pursue further legal remedies, which the company will evaluate in due course.”

The dispute stems from Kotak AMC's 2016 Essel FMP bets.

Essel Group entities failed to top up the pledged shares.