Mumbai: Singer Suchitra Krishnamoorthi has settled the case with financial services major HSBC over alleged mismanagement of her funds.
The singer had filed a complaint with capital market watchdog Sebi in January last year against HSBC alleging that as a mutual fund distributor it caused losses to her.
The Securities and Exchange Board of India (Sebi) investigated the matter for the period from June 18, 2004 to February 28, 2011 to check for any violations.
“… the noticee (HSBC) vide its letter dated March 20, 2014 informed Sebi that the matter has been amicably settled. The complainant vide letter dated July 1, 2014 also stated that the matter has been settled with regard to the complaint against the noticee,” Sebi Whole Time Member S Raman said in an order today.
Krishnamoorthi was registered with HSBC as a client of Retail Banking and Wealth Management Services. During Sebi probe, it was revealed that there was excessive churning in the portfolio of the complainant.
“The complainant’s money had been invested in 38 different schemes of various mutual funds. Some of the investments were also not in line with the risk profile of the complainant,” the order said.
It is also seen that a large number of the investments made in mutual fund schemes were redeemed in a short span of time and on many instances redemption proceeds were used to invest in similar mutual fund schemes, according to the order.
“The total commission/charges earned by the noticee against transactions in the name of the complainant was Rs 27,93,844.60,” it added.
Sebi issued a show cause notice to HSBC in November 2013 and the entity sent its responses in December that year.
In the responses, among others, HSBC mentioned that it did not make investments on behalf of the client and acted pursuant to the client’s specific instructions, among others.
Following the same, an opportunity of personal hearing was granted on March 5, 2014.
During the hearing, it was submitted that efforts were on to settle the matter amicably with the complainant.
Later, on March 20, HSBC informed Sebi said the matter has been amicably settled.
Besides the show cause notice has also been disposed of by Sebi without any further directions.