Sebi on Thursday said there was no provision for standstill agreements between mutual funds and their borrowers in any regulations and all entities need to follow the same rules.
“It is not there in any of the regulations. We have made our position clear. Entities have to follow the regulations that are there. There is no confusion in that,” Sebi Chairman Ajay Tyagi said.
The Sebi observation came a day after Subhash Chandra-led Essel Group claimed it has got unanimous backing from lenders including fund houses to further extend its repayment timelines for its balance dues. Mutual funds had first given an extension, called as standstill agreement, to the financially embattled group till September, creating a new precedent. This move was done in the face of a massive decline in the market price of Zee Entertainment Enterprises, the flagship company in the group, where promoters had pledged holdings.
On September 20, the Zee group said it was in a steady dialogue with lenders. Zee also asked its lenders to extend its September 30 deadline for repayment of debt. On reports of SBI writing to Sebi to make an exception in the DHFL restructuring case, Tyagi said there are already regulations on Inter Creditor Agreements for MFs and that is the policy.