The Securities Appellate Tribunal (SAT) has ordered HSBC Mutual Fund to provide an exit route to two of its investors in HSBC Gilt Fund ? Short Term Plan where the fund house had modified the fundamental attributes without informing its unit holders.
The net asset value (NAV) for the exit route will be the price prevalent on the day when the fund house made changes to the scheme’s fundamental attributes.
The matter relates to an investment of R 2.52 crore made by Subramanian R Venkat and his wife Anuradha Venkatasubramanian in HSBC Gilt Fund -Short term Plan in October and November 2008.
The scheme which was meant for investment in government securities with an average maturity of 5 to 7 years as mentioned by the offer document was changed to a term investment not exceeding 15 years.
The complainants alleged that the sharp fall in the funds NAV by 10% in just three days from January 6, 2009 was on account of the changes made in the scheme and that too without informing the unitholders and without giving them a reasonable opportunity to exit the scheme.
They further allege that they were completely unaware of the changes until March 2009, when they exited the scheme at a loss. Subsequently a complaint was lodged with SEBI requesting it to intervene and make good the losses suffered by them.
The tribunal has criticised the Sebi whole-time member for the way the case was dealt with.
?We are really amazed that the whole-time member after recording a finding that… changed the scheme which affected the interest of the unitholders without complying with Regulation 18 (15A) of the Regulations failed to issue directions… for complying with the provision,? noted the 16-page SAT order.