Axis Trustee Services: Axis Trustee Services pays Rs 20 lakh, settles debenture trustee norms violation case

New Delhi:

Axis Trustee Services

has settled a case with

Sebi

for alleged violation of debenture trustees norms after paying nearly Rs 20 lakh towards settlement charges.

The adjudication proceedings were initiated and notice was sent to the firm by Sebi in September 2018 after observing alleged violations of debenture trustee norms and relevant circulars.

Axis Trustee was acting as debenture trustee for Reliance Communications (RCom) which had defaulted on repayments of non-convertible debentures (NCDs) issued by it, Sebi said in an order dated Apr 2, 2019.

Therefore, it was alleged that Axis being the debenture trustee did not carry due verification to ascertain that debenture holders have been paid the dues in a timely manner.

Additionally, Axis neither shared the information on non-cooperation of Reliance Communications with the credit ratings agencies nor it issued a press release or inform Sebi regarding default by RCom in making payment of principal and interest amount to debenture holders on due dates among other alleged lapses, Sebi said.

While the proceedings were pending, Axis Trustee filed a settlement application with Sebi without admitting or denying the guilt.

In January 2019, the firm in its meeting with the internal committee of Sebi proposed to pay Rs 15.93 lakh towards the settlement charges.

The amount after approval of the panel of Sebi’s whole time members was remitted by Axis Trustee Services on March 15, 2019.

However, it was later communicated to the firm that it was liable to pay increased 25 per cent on the settlement amount on account of making delay in filing the settlement application.

Thereafter additional amount of Rs 3.98 lakh was thereby paid by the firm, taking the total amount to Rs 19.92 lakh.

Accordingly, the Securities and Exchange Board of India (Sebi) said proceedings for the alleged defaults have been disposed of.

Source

Author: Prakash Poojary

Business Analyst

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