SEBI v. Bhanu Katoch and others (JM Financial Mutual Fund NAV jump, 2024)

Judgment entered

✓ Checked against the primary document on October 9, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, in a single reading of the order; an independent second reading of 60 SEBI records agreed on every field for 56, the four misses being penalty amounts; a later sample of 50 of the SEBI records added on 9 October agreed on every field for 46. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

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On 31 July 2024 a SEBI adjudicating officer penalised JM Financial Mutual Fund's chief executive, an institutional sales head, relatives and the fund company and trustee Rs 2.01 crore in total, finding that units were bought ahead of a known NAV jump from the sale of defaulted DHFL debt.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

—

Alleged gain

—

Penalty as published

20.1m INR

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars. This regulator states penalties in INR. The figure is recorded as published and is not converted, so it does not appear in the USD totals or medians used elsewhere on this site.

What is alleged to have happened

SEBI adjudicating officer N. Hariharan issued this order on 31 July 2024. It covers seven noticees: Bhanu Katoch, chief executive of JM Financial Asset Management, his mother Swarn Lata Katoch, Sharika Kher, Deepen Doshi, who headed institutional sales, his mother Aruna Doshi, and the asset management company and its trustee company.

SEBI began after a July 2020 news report of an unusual jump in the net asset value of some JM debt funds. The order records that six schemes held defaulted securities of Dewan Housing Finance Corporation, carried at nil value, which the fund sold on 6 July 2020 to A.K. Capital for a total of Rs 11.18 crore, after a SEBI circular of 23 June 2020 allowed dealing in such securities. Because the securities had been valued at nil, the whole sale price counted as gain, and NAVs rose by as much as about 19.9 percent in one scheme. SEBI alleged that the chief executive, the sales head and some relatives had bought units between 23 June and 3 July 2020, before the NAV jump, using non-public knowledge of the planned sale, and that the company and trustee failed to protect other unitholders.

The officer found Regulations 3(a), 4(1) and 4(2) of the PFUTP Regulations 2003 with section 12A(e) of the SEBI Act established against the five individuals, and found breaches of the mutual fund conduct rules by the company and trustee. The order quantifies notional gains from the purchases, such as Rs 91.5 lakh for Mr Katoch and Rs 7.5 lakh for Mr Doshi, and says the two executives misused their positions.

The penalties were Rs 1.10 crore on Mr Katoch, Rs 22 lakh on Mr Doshi, Rs 17 lakh on Ms Katoch, Rs 9 lakh on Mrs Doshi, Rs 8 lakh on Ms Kher, Rs 25 lakh on the asset management company and Rs 10 lakh on the trustee company, a total of about Rs 2.01 crore. No trading restriction was imposed in this order.

The record does not show whether any noticee appealed, whether the gains were repaid to the fund, or what happened to the buyer of the defaulted securities.

This library tags the matter as insider trading. The tagging is ours, not the regulator's.

For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the order.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Insider trading — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2024-07-31 SEBI adjudication order

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEBI order
• SEBI order (PDF)

The linked release is published by the issuing regulator under its own terms. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added October 8, 2026. submit a correction.