The Competition Commission of India (CCI) is initiating an investigation into the trustee units of State Bank of India (SBI), Axis Bank and IDBI Bank. The investigation is being done following allegations of suspected collusion over fees.
This is likely to spark a legal battle in the coming days. As per the rules, debt-raising companies have to appoint a so-called debenture trustee to protect the interests of investors.
The trustees oversee the debt issuing companies by charging them fees. SBI, Axis Trustee and IDBI Trustee are under investigation. All three of them make billions of dollars by providing trustee services for debt securities.
The CCI, in an order in December, said the Trustees Association of India last year increased the fee to assist companies raising debt and prevent members from going below the fixed price.