sebi:SO/2024-25/PSD/58-64

SEBI · SEBI · 2022-11-14 · Kamlesh C. Varshney, Whole Time Member; Amarjeet Singh, Whole Time Member

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Facts / Headnote

Settlement of enforcement proceedings; SEBI shall not initiate enforcement action against the Applicants for the said violations.

Provisions invoked

• s. 19
• s. 15J

Regulations

• Reg. 25
• Reg. 28
• Reg. 23
• Reg. 29(7)
• Reg. 29(5)
• Reg. 16

Parties

• AIF
• Manager
• KMPs
• Trustee

Holding

SEBI settled the enforcement proceedings against the AIF, the Manager, the KMPs and the Trustee for violations of the AIF Regulations relating to delayed liquidation of assets upon winding up, on payment of ₹25,50,000/-, and agreed not to initiate enforcement action for the said violations.

Full text

2 2. The Trustee vide letter dated November 14, 2022 intimated SEBI about the initiation of the winding up of the Fund. As per Regulation 29(7) read with Regulation 29(5) of the AIF Regulations (prior to the amendment dated June 15, 2023) the Scheme is required to liquidate all its assets within 1 year from the date of the intimation by the Trustee to SEBI about the circumstances leading to the winding up of the AIF. Further, as per Article 21.3 of the Trust Deed, the Trustee or duly appointed liquidator is required to liquidate and distribute the assets of the Fund within 12 months from the date of the termination. However, the disinvestment was completed only on July 06, 2024 i.e. more than 1.5 years after the date of the intimation.

3 5. On the basis of the facts stated above, in exercise of the powers conferred under Section 15JB read with Section 19 of the SEBI Act, 1992 and in terms of Regulations 23 of the Settlement Regulations, the specified proceedings, in respect of which the Notice was issued, are hereby settled in respect of the Applicants on the following terms: i. SEBI shall not initiate any enforcement action against the Applicants for the said violations, and ii. Passing of this Settlement Order is without prejudice to the right of SEBI under Regulations 28 and 31 of the Settlement Regulations to initiate appropriate action against the Applicants, if SEBI finds that: (a) any representation made by the Applicants in the present settlement proceedings is subsequently found to be untrue; (b) the Applicants have breached any of the clauses/ conditions of undertakings/ waivers filed during the present settlement proceedings; and (c) there is a discrepancy while arriving at the settlement terms.

3. In terms of Regulation 16 of the SEBI (Settlement Proceedings) Regulations, 2018 (hereinafter referred to as “Settlement Regulations”), SEBI issued a ‘Notice of Summary Settlement’ dated January 07, 2025 (hereinafter referred to as the “Notice”) to the AIF, the Manager, the KMPs and the Trustee (hereinafter collectively referred to as the “Applicants”) intimating them of the relevant provisions of the AIF Regulations, as mentioned in paragraph 1 and that, if the Applicants so desired, the enforcement proceedings to be initiated for the same may be settled and disposed of upon filing of an application under the Settlement Regulations along with remittance of the settlement amount of ₹25,50,000/- (Rupees twenty five lakhs and fifty thousand only) to be paid jointly and severally within 30 calendar days from the date of receipt of the Notice in terms of Chapter VII of the Settlement Regulations.

Source: SecMarx — sebi:SO/2024-25/PSD/58-64. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.