PENALTIES, PENDING LITIGATION OR PROCEEDINGS, FINDINGS OF INSPECTIONS OR INVESTIGATIONS
FOR WHICH ACTION MAY HAVE BEEN TAKEN OR IS IN THE PROCESS OF BEING TAKEN BY ANY
REGULATORY AUTHORITY.
1. All disclosures regarding penalties and action(s) taken against foreign Sponsor(s) may be limited to the jurisdiction of the
country where the principal activities (in terms of income / revenue) of the Sponsor(s) are carried out or where the
headquarters of the Sponsor(s) is situated. Further, AMCs are required to disclose penalties, pending litigation etc. for the
last 5 financial years and wherever the amount of penalty is more than 5 lakhs.
NIL
2. In case of Indian Sponsor(s), details of all monetary penalties imposed and/ or action taken during the last five financial
years and wherever the amount of penalty is more than 5 lakhs or pending with any financial regulatory body or governmental
authority, against Sponsor(s) and/ or the AMC and/ or the Board of Trustees /Trustee Company; for irregularities or for
violations in the financial services sector, or for defaults with respect to share holders or debenture holders and depositors,
or for economic offences, or for violation of securities law. Details of settlement, if any, arrived at with the aforesaid authorities
during the last five financial years shall also be disclosed.
Not Applicable
3. Details of all enforcement actions taken by SEBI in the last five financial years and/ or pending with SEBI for the violation of
SEBI Act, 1992 and Rules and Regulations framed there under including debarment and/ or suspension and/ or cancellation
and/ or imposition of monetary penalty/adjudication/enquiry proceedings, if any, to which the Sponsor(s) and/ or the AMC
and/ or the Board of Trustees /Trustee Company and/ or any of the directors and/ or key personnel (especially the fund
managers) of the AMC and Trustee Company were/ are a party. The details of the violation shall also be disclosed.
a. SEBI vide its Adjudication Order dated August 08, 2024 has imposed a penalty to the extent of Rs. 2 Lacs on the AMC
& Rs. 1 Lac on the Trustee company wrt charging of expenses/ TER in respect of certain ETF schemes from AMC
books.
b. In August 2024, AMC and certain other Key Personnels have received a notice under Rule 4 (1) of the SEBI (Procedure
for Holding Inquiry and Imposing Penalties) Rules, 1995 wrt certain investment made in AT-1 Bonds of Yes Bank
Limited by then Reliance Mutual Fund. The SCN alleges non-compliances with certain provisions of SEBI (Mutual Fund
Regulations) 1996, and SEBI (Prohibition of Fraudulent and Unfair trade Practices relating to Securities Market)
Regulations 2003.
4. Any pending material civil or criminal litigation incidental to the business of the Mutual Fund to which the Sponsor(s) and/ or
the AMC and/ or the Board of Trustees /Trustee Company and/ or any of the directors and/ or key personnel are a party
should also be disclosed separately.
a. GST Orders :
➢ On January 31, 2025, Nippon Life India Asset Management Limited (NAM India) received an order from The Joint
Commissioner, CGST & CX Commissionerate Thane u/s 74 of the Central Goods and Services Tax Act, 2017 in the
matter of availment and utilization of Input Tax Credit and demand penalty. In this regard, NAM India would pursue
filing an appeal with Appellate Authorities or will evaluate other options against the said order.
➢ On February 06, 2025, Nippon Life India Asset Management Limited (NAM India) has received an order from The Joint
Commissioner, CGST & CX Commissionerate u/s 74 of the Central Goods and Services Tax Act, 2017 in the matter of
Input Tax Credit on brokerage paid to distributors along with penalty. In this regard, NAM India would pursue filing an
appeal with Appellate Authorities or will evaluate other options against the said order.
➢ On February 06, 2025, Nippon India Mutual Fund (NIMF) received an order from The Joint Commissioner, CGST & CX
Commissionerate u/s 74 of the Central Goods and Services Tax Act, 2017. The GST Department alleged non payment
of GST on income received from lending of securities under Securities Lending Schemes 1997 by schemes of Nippon
India Mutual Fund pertaining to period from 1st July, 2017 to 30th September, 2019, along with penalty. In this regard,
NIMF would pursue filing an appeal with Appellate Authorities or will evaluate other options against the said order.
b. Income Tax Order:
➢ In terms of the SEBI [Mutual Fund] Regulations, 1996 (as amended from time to time), the mutual fund schemes are
permitted to invest in securitized debt. Accordingly, investments in certain Pass Through Certificates (“PTC’s”) of a
securitization trust (“the Trust) were made through some of schemes of Nippon India Mutual Fund (“the Fund”). The
returns filed by few of these securitisation Trusts whose PTCs were held by the Fund were taken up for scrutiny by the
Income Tax Authorities which raised demand initially on the Trusts. However, on failure to recover, the Income Tax
Authorities sent the demand notices to the Fund for Assessment Years 2009-10 and 2010-11. The Fund in consultation
with its tax & legal advisors has contested the applicability of such demand and proceedings. At present the
department’s appeal is pending before the Bombay High Court. It may be noted that this is a matter which is not
restricted only to the Fund but is an Industry issue. Accordingly, through the Association of Mutual Funds in India
(AMFI), the matter has also been appropriately escalated to the Ministry of Finance. In addition to the above the AMC
is party to certain litigations in various courts, commissions etc. which are in ordinary course of business & have no
material impact.
5. Any deficiency in the systems and operations of the Sponsor(s) and/ or the AMC and/ or the Board of Trustees/Trustee
Company which SEBI has specifically advised to be disclosed in the SID, or which has been notified by any other regulatory
agency, shall be disclosed.
There was no deficiency in the systems and operations of the Sponsor(s) and/ or the AMC and/ or the Board of
Trustees/Trustee Company which SEBI has specifically advised to be disclosed in the SID, or which has been notified by
any other regulatory agency.
