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Sebi Alerts Mutual Funds Against Bailout of Companies

Sebi Alerts Mutual Funds Against Bailout of Companies

The stock market regulatory alerts mutual funds against cutting cosy deals with organizations as banks turn off credit taps to distressed borrowers. Sebi has told that, mutual funds not to get into transactions aimed at bailing out corporates at the cost of investors.

Sebi carried this to mutual fund executives in a recent meet to discuss industry’s growth roadmap. Top officials of Sebi including chairman UK Sinha, whole-time director Mr. S Raman and executive director Mr.  Ananta Barua attended the meeting.

In recently, has stepped up vigil on mutual fund portfolios as various funds dress up their portfolios to hide few of their lowly-rated bonds. The regulatory is inquiring if funds transferred papers of low credit quality, from one scheme to another, a practice known as interscheme transfer. In the past has pulled up mutual funds for moving securities at valuations that are not assessed fair.

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