sebi:WTM/SR/SEBI/IMD-DF3/52/10/2016

SEBI · SEBI · 2014-11-14 · S. Raman, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Complaint disposed of - no merit found in the issues raised by the Complainant

Regulations

• Reg. 199
• Reg. 42
• Reg. 39(2)
• Reg. 39(2)(c)
• Reg. 39(3)(a)
• Reg. 41(1)
• Reg. 41(3)

Holding

The Complainant's claim for interest for the alleged delay in redemption of units under UTI-SCUP from the date of termination (February 18, 2008) to the date of payment (September 13, 2014) was rejected, and the complaint was disposed of as lacking merit.

Full text

Page 2 of 11 2. The aforesaid complaint was forwarded to UTI MF for their comments. In response, UTI MF submitted the following on November 14, 2014 (on SCORES) as under: a) The scheme had been terminated on February 18, 2008 in accordance with the established business principles and in the interest of unit holders to avoid any capital erosion and after due consideration of all the facts and circumstances with the approval of respective Boards of UTI and New India Assurance Company Ltd (“NIAC”) as well as with approval of Government of India (“GOI”)/SEBI. b) Accordingly the members below 58 years of age as on February 18, 2008 were requested to redeem the outstanding units under the folio. c) Besides issuing public notice in this regard in various newspapers, individual letters were also sent to each member under the Scheme. Reminder letters were sent to the investor on July 21, 2009, January 06, 2010, February 19, 2011, October 17, 2011 and July 25, 2012. All the letters got returned undelivered with the reason ‘Addressee left’. d) On July 16, 2014, AMC forwarded a detailed e-mail providing redemption procedure and also advised investor to redeem balance units @ 23.2257(NAV as on February 18, 2008) at the earliest since there will not be any accruals/ addition to these units. e) On receiving redemption request, redemption amount was credited to the investor’s account on September 12, 2014.

Page 3 of 11 d) The interest rates had declined substantially and the premium charged by NIAC had also increased substantially due to which the investment portfolio of the scheme is not self-supporting the cost. Further, UTI-SCUP was not compliant with SEBI Mutual Fund regulations. e) Options were offered to UTI-SCUP investors falling under various age groups e.g switch to alternate product of NIAC or redeem outstanding units at the prevailing NAV of Feb 18, 2008.

Page 4 of 11 7. Subsequently, SEBI received e-mails dated February 24, 2015, March 17, 2015 and April 22, 2015 from the Complainant inter alia alleging the following : a) Complaint 1: Against UTI MUTUAL FUND Scheme – Senior Citizen Unit Plan 93 (SCUP 93) The Complainant alleged the violation of regulations 39(2) and 40(c) in winding up of scheme and differential treatment given to investors by classifying them in 3 categories (age group). It was stated that regulation does not permit differential treatment given to the investors. The Complainant also sought interest for the delay in redemption of its units in the scheme. b) Complaint 2: Non provision of the basis of decision of disposal of complaint no. SEBIE/MH14/0009644/1- a violation of the fundamentals principles of justice system in India. The Complainant sought redressal of the issue with UTI MF and also sought details of SEBI’s decision with regard to his complaint and the replies received from UTI MF in response to his complaint.

Source: SecMarx — sebi:WTM/SR/SEBI/IMD-DF3/52/10/2016. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.