Bombay High Court on Monday put on hold an antitrust investigation into trustee units of State Bank of India (SBI), Axis Bank and IDBI Bank for suspected collusion on fees, saying the market regulator Securities and Exchange Board of India (SEBI) would first look into the case.
Indian regulations mandate that companies raising debt appoint a so-called “debenture trustee” to protect the interests of investors. The trustees charge a fee from the companies issuing the debt and make due-diligence checks on them.
Reuters reported last week the Competition Commission of India (CCI) had ordered an investigation into debt trustee units of the three banks and a group representing them had gone to court seeking to quash the probe.
Hearing the plea, the judges in Bombay High Court said SEBI – which is also investigating the matter – should complete its probe within 60 days, and until then the antitrust investigation will remain on hold.
SEBI is the sectoral regulator and should first review the allegations, the trustees had argued in the court.
The three under investigation – SBICAP Trustee Company, Axis Trustee and IDBI Trusteeship – are among the leaders in the business in India overseeing hundreds of billions of dollars by rendering trustee services for not just debt securities, but also real estate and other investment funds.