Sebi modifies interim directions for Axis Capital in merchant banker norms violation case
Sebi on Tuesday modified its interim order prohibiting Axis Capital Ltd from engaging in any transactions in the debt segment that involve providing credit risk cover, guarantees and indemnities for the purchase of pledged shares until further notice. Sebi, in its interim order in September, prohibited Axis Capital from undertaking new assignments as a merchant banker, arranger, or underwriter for debt securities until further notice.
The matter pertains to Axis Capital Limited (ACL) allegedly violating Merchant Bankers (MB) Regulations in connection with non-convertible debentures (NCDs) issued by Sojo Infotel Pvt. Ltd.
The violations mainly involved ACL providing guarantees/indemnities for NCD redemption in case of default, an activity considered outside the scope of underwriting or issue management.
After reviewing the matter, Sebi's Whole Time Member Ashwani Bhatia in said, «I am willing to modify the interim direction issued in the interim order, so as to limit the debarment to the activities alleged to be in violation of the provisions of the MB Regulations, 1992, as covered in the Interim Order».
Modifying the interim order, Sebi prohibited ACL from engaging in any transactions in the debt segment that involve providing credit risk cover, guarantees, indemnities for the purchase of pledged shares, or participating in structured secured credit transactions, until further notice.
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