India's securities market regulator on Tuesday ordered cancellation of certificate of registration of Sahara Mutual Fund as it found the fund house, Sahara Asset Management Company (AMC) and Sahara Sponsor not "fit and proper" to carry on the business.
According to a statement, the Securities and Exchange Board of India (SEBI)'s whole-time member Prashant Saran passed the order as Sahara Mutual Fund along with Sahara AMC and Sahara Sponsor were found to be no longer "fit and proper" persons to carry out the business of Mutual Fund.
"However, keeping the interests of unit holders, the order of cancellation of the Certificate of Registration of the Sahara Mutual Fund shall be effective on expiry of six (6) months from the date of the said order," the statement said.
Pending the cancellation of the registration certificate,it SEBI directed Sahara Mutual Fund to comply with the following: Sahara Mutual Fund/ Sahara Asset Management Company Pvt Ltd (Sahara AMC) shall not take any new subscription from the investors (including existing investors in Systematic Investment Plans (SIP)/Systematic Transfer Plans (STP); Further, the Sahara Mutual Fund shall not levy any penalties/ loads on the SIP/ STP investors for not depositing the installments.
Sahara Mutual Fund shall make efforts to transfer the activities of Sahara India Financial Corporation Ltd (Sahara Sponsor) and Sahara Asset Management Company Pvt Limited (Sahara AMC) to a new sponsor and a SEBI approved asset management company at the earliest.
The Board of Trustees of the Sahara Mutual Fund shall oversee and ensure protection of the unitholders' interests during the above period. On transfer of the activities as mentioned above, the Board of Trustees shall be re-constituted in accordance with the SEBI (Mutual Fund) Regulations, 1996.
In the event of failure of Sahara Mutual Fund to complete the process of transition as mentioned at para (ii) above, within a period of five (5) months from the date of this order, then it should compulsorily redeem the units allotted to its investors and credit the respective funds to its investors, without any additional cost, within a period of thirty (30) days thereafter and wind up the operations of the Mutual Fund.
