Invesco Mutual Fund may face probe on allegations of mismanagement in fixed income schemes

The third allegation focuses on the period post IL&FS default, and claims the fixed income team of Invesco MF identified certain securities like DHFL which were likely to come under stress and initiated an inter-scheme transfer (IST) of the same to their offshore funds. While IST itself was not illegal at the time, what could be a concern is the impact of the same on Invesco’s offshore clients.

The whistleblower is understood to have first raised the issue with senior management and on the internal Invesco hotline, post which the whistleblower is understood to have approached SEBI and the US financial regulator SEC. The whistleblower was dismissed in July 2021 for conduct unbecoming despite being given additional responsibilities in December 2020. This issue of wrongful termination has now been filed as a civil suit in Bombay High Court.

In their response, Invesco MF has said, "As is appropriate for a global financial services company, Invesco maintains policies and procedures for investigating allegations of improper conduct received from any source. Invesco always handles such matters in an appropriate manner, consistent with global best practices. This includes global oversight and independent, impartial review. Invesco seeks to maintain excellent relations with all our regulators. We co-operate with any regulatory inquiries (including any examinations or investigations) in a manner that is transparent and consistent with global best practices. As part of corporate policy, it will be inappropriate for us to divulge any individual or employment details of any of our employees. Our portfolios and business remain unaffected. All Invesco funds and investment strategies operate under our global risk management framework and invest according to the parameters and guidelines set out in the relevant prospectus or other governing document."

CNBC-TV18 is still awaiting the response of SEBI on the issue.