SAT stays Sebi ban on Catalyst’s trustee services to funds
The Securities Appellate Tribunal (SAT) has stayed a Securities and Exchange Board of India (Sebi) order banning Catalyst Trustee from providing trustee services to funds.
The () has stayed a Securities and Exchange Board of India () order banning from providing trustee services to funds.Sebi had on 28 February banned Catalyst Trustee from acting as a trustee to funds for one year because it found it guilty of lapses in its role as a trustee of the Brick Eagle Fund which had failed to meet its commitments to investors and is being wound up. Brick Eagle has also been banned.
A fund trustee's role involves the protection of the interests of investors in a fund.
However, Catalyst argued that Brick Eagle Fund was liable for meeting commitments to investors and that as a trustee its role was limited to ensuring that all processes for winding down of the fund were being undertaken.
It cited that Sebi had observed in its order that ‘Catalyst is taking steps to liquidate the investment proceeds of the fund’. SAT noted it was satisfied with assurances made by Catalyst.
Catalyst is the largest debenture trustee with a 37-38% market share. It is estimated that it acts as a trustee for debenture investments worth Rs. 20 lakh crore. As a debenture trustee, its role is to protect the interest of debenture holders and manage compliance. No adverse directions were issued over Catalysts’s operations as a debenture trustee in Sebi’s 28 February order.
Source: Stocks-Markets-Economic Times
