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Nippon Life India Asset Management is under regulatory glare after the Central Bureau of Investigation (CBI) sought details regarding approval of an investment of up to Rs 3,500 crore in select Anil Dhirubhai Ambani Group (ADAG) firms, including Reliance Capital, Reliance Home Finance and Reliance Commercial Finance.

Nippon Life India AMC, formerly known as Reliance Mutual Fund, is already under the CBI scanner for investing Rs 950 crore in non-convertible debentures (NCDs) of Morgan Credit Private Limited, a company owned by the Rana Kapoor family.

The details are being sought as part of a larger multi-agency investigation - examining cumulative investments worth around Rs 2,850 crore made by firms that were formerly owned by Reliance Capital - in the AT1 bonds issued by Yes Bank.

An email query sent to Nippon Life India AMC remained unanswered till the time of publishing this story, and the story will be updated once the fund house responds.

Also Read: Nippon India Mutual Fund under CBI scanner in Yes Bank AT1 bonds matter

Sources aware of the matter said the central probe agency has written to the asset management company (AMC) last month seeking details with respect to the manner in which the Investment Committee of the AMC, at its meeting on January 10, 2017, initially approved a combined long-term limit of Rs 1,000 crore for Reliance Capital and Reliance Home Finance.

Later on, as per the CBI communication to Nippon India MF, the Investment Committee increased the limit to Rs 3,500 crore while including three ADAG entities namely Reliance Capital, Reliance Home Finance and Reliance Commercial Finance.

The CBI has sought details such as the reason for the limit increase, and more importantly, who proposed the hike in investment limit and who approached the AMC for the hike. The investigative agency has also sought details regarding actual investments made against the enhanced limit, and the present status of the investments. Further, the agency has also asked the fund house to provide details in case the limit was further increased from Rs 3,500 crore for the three entities.

Incidentally, the probe pertains to the period when the fund house was known as Reliance MF. The name of the fund house was changed from Reliance Mutual Fund to Nippon India Mutual Fund in September 2019.

Also Read: Nippon Life India MF investors lost over Rs 1,800 crore due to Yes Bank AT-1 bond exposure, says Sebi

Meanwhile, the Securities and Exchange Board of India (SEBI) had also issued a show-cause notice to the AMC in August last year, along with other entities including Anil Ambani, his son Jai Anmol Ambani, Rana Kapoor and top executives of Nippon India MF including CEO Sundeep Sikka.

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