Supreme Court: A mutual fund cannot escape a regulatory breach because investors gained; Kotak penalties upheld
The question: Is it a defence to a breach of the SEBI (Mutual Funds) Regulations, 1996 that investors suffered no loss, or gained?
Kotak Mahindra's asset management company, its trustee and senior executives appealed SEBI penalties over six close-ended schemes, whose investments in Essel group debentures were extended beyond the schemes' maturity dates while part of investors' money was held back. They argued nobody lost and investors even gained. The Supreme Court dismissed all the appeals.