Nippon Life AMC to settle Yes Bank AT-1 bond case

Nippon Life AMC said any money recovered following the court ruling would go to investors in the relevant mutual fund schemes and would not affect the company's financial results.Earlier this month, the Supreme Court set aside Yes Bank's write-off of Rs 84 billion in AT-1 bonds. (Photo: Reuters)Nippon Life India Asset Management said on Thursday it has received in-principle approval from India's markets regulator to settle a dispute over alleged fraudulent investments in Yes Bank additional tier-1 bonds after paying Rs 967.6 million ($10.2 million).The asset manager, a unit of Japanese insurer Nippon Life Insurance, said it had paid the settlement charges during the September quarter, but was awaiting a formal settlement order.India's markets regulator had alleged that between 2016 and 2019, Reliance Mutual Fund, now known as Nippon Life India Mutual Fund, invested Rs 21.5 billion in Yes Bank's AT-1 bonds in return for industrialist Anil Ambani-backed companies receiving loans.Anil Ambani, the younger brother of billionaire Mukesh Ambani, sold Reliance Mutual Fund to Nippon Life in October 2019. Reliance Mutual Fund's investment in AT-1 bonds became worthless after Yes Bank was declared insolvent in 2020.Incidentally, earlier this month, the Supreme Court set aside Yes Bank's write-off of Rs 84 billion in AT-1 bonds, dealing a blow to the lender but providing relief to bondholders. Nippon Life AMC said any money recovered following the court ruling would go to investors in the relevant mutual fund schemes and would not affect the company's financial results.The one-time settlement charge weighed on the asset manager's September-quarter earnings, with net profit falling nearly 6% to Rs 3.24 billion.Nippon Life AMC's quarterly average assets under management rose 20% to Rs 7.87 trillion during the quarter, driven by continued inflows from domestic retail investors. Its operating profit rose 25% to Rs 5.23 billion.- Ends