Axis Bank has settled a case related to an alleged violation of debenture trustee norms with Sebi, after paying Rs 2.43 crore towards settlement charges.
Axis Bank has settled a case related to an alleged violation of debenture trustee norms with Sebi, after paying Rs 2.43 crore towards settlement charges. According to the private sector lender’s website, “Axis Bank is a Sebi-registered debenture trustee.” The adjudication proceedings against Axis Bank were initiated after the regulator sent a show-cause notice in June 2018 on observing violations of debenture trustee regulations. It was alleged that the bank had “lent to issuer companies to which it also extended debenture trustee services” and also failed to obtain quarterly reports from the issuer companies.
Besides, non-incorporation of mandatory clauses in the trust deed and lack of due diligence to ensure compliance of listing agreement by the issuer company were among the allegations. Also, the lender was alleged to have falsely reported that corrective steps had been taken since previous inspection. However, while the case proceedings were pending, Axis Bank filed a settlement application with Sebi “without admitting the findings of fact and conclusions of law”.
In May 2019, the lender in its meeting with the internal committee of Sebi proposed terms to settle the alleged defaults. The amount of Rs 2.43 crore after approval of a panel comprising Sebi’s whole-time members was remitted by Axis Bank on July 19, 2019, for the settlement. Accordingly, the Securities and Exchange Board of India (Sebi) said proceedings for the defaults have been disposed of.