The Securities Appellate Tribunal (SAT) has ordered the HSBC Mutual Fund to compensate some of the investors who invested in one of its debt schemes.
The tribunal issued its second order in little over a year asking the company to compensate for the losses suffered on the same debt scheme by the investors. The tribunal orders will change the way aggrieved investors are treated by the asset management companies.
The new order comes after a complaint by a scheme holder who claimed that the company did not allow the investors to exit their investments after it changed basic attributes of the debt scheme. Subramanian Venkat and his wife Anuradha Venkatasubramanian had made an appeal to SEBI asking for its intervention in the matter.
SEBI decided to spare the asset management company only with a warning. Following this, the couple decided to approach the tribunal for compensation. The tribunal set aside SEBI order and directed HSBC Mutual Fund to compensate aggrieved investors.
Following the victory, a dozen other investors also moved SAT jointly and the petition was upheld by SAT in investors' favor.