Nippon Life AMC execs apply for settlement in Yes AT1 case
Nippon Life India Asset Management, including CEO Sundeep Sikka, head of fixed income Amit Tripathi, and Milind Nesarikar, have applied for a settlement with market regulator Securities and Exchange Board of India (Sebi) in the ongoing Yes Bank AT1 bond case, in order to avoid formal proceedings, according to sources familiar with the matter.
A legal expert said that if Sebi accepts the settlement, formal proceedings may not be pursued further.
The probe, initiated by Sebi in 2022, focuses on Nippon Life India Asset Management (earlier Reliance Mutual Fund) over its ₹2,500 crore investment in Yes Bank's Additional Tier 1 (AT1) bonds. The investigation probes whether the former promoter, Anil Ambani's Reliance Capital, influenced the fund's investment decision, potentially impacting the fiduciary responsibility of its executives.
Sebi's inquiry into Nippon Life is to determine if Sikka or other senior leaders had a direct role in the investment and to what extent Reliance Capital's influence played a role in the decision-making process.
AT1 bonds are perpetual bonds with no fixed maturity, offering higher yields to compensate for their elevated risk profile. In 2020, amid a severe financial crisis at Yes Bank, these AT1 bonds were marked down to zero as part of a government-backed restructuring plan, resulting in substantial losses for institutional investors and individuals.
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