Kotak Mutual Fund has suspended fresh investments in Kotak Medium Term Fund and Kotak Credit Risk Fund from Thursday.
The decision follows the Supreme Court judgement ruling that YES Bank’s write-off of ₹8,415 crore in Additional Tier-1 bonds was illegal and arbitrary. It has upheld the January 2023 Bombay High Court order on Thursday.
Both these schemes had invested in AT1 bonds of Yes Bank. These bonds were valued at a nil (zero) market value during the reconstitution of Yes Bank in March 2020, said the fund house.
Kotak MF has stopped fresh additional lumpsum/switch-ins transactions and fresh SIP/STP registration in both these funds temporarily.
Earlier today, we proactively suspended subscriptions in both funds as a prudent measure to safeguard the interests of our investors, it said.
“We have taken similar proactive measures in the past and remain committed to acting in the best interests of our unitholders,” said Kotak Mahindra AMC.