Sebi pulls up mutual fund industry over dividend distribution practice

Sebi asked trustees to uphold corporate governance standards; presented findings of its recent inspection report

The Securities and Exchange Board of India (Sebi) on Wednesday pulled up the mutual fund industry over the practice of distributing dividends without the consent of trustees.  According to sources, the market watchdog took a serious view of this breach during a meeting with independent trustees, who sit on the boards of asset management companies (AMCs).

The meeting was attended by Ajay Tyagi, chairman, Sebi, Madhabi Puri Buch, whole time member, Sebi and more than 80 independent trustees. It was the first meeting between independent trustees and the Sebi chairman Ajay Tyagi.

Tyagi said that the primary reason for calling