HDFC Capital Resolves AIF Rule Violation Case with Sebi

HDFC Capital Advisors and HDFC Capital Affordable Real Estate Fund-I settled a case with Sebi concerning alleged AIF rule violations by paying Rs 36 lakh. The settlement resolves potential enforcement actions without admitting guilt. Sebi noted issues with conflict of interest and inaccurate compliance reporting.

HDFC Capital Advisors, along with HDFC Capital Affordable Real Estate Fund-I, has settled an enforcement case with the Securities and Exchange Board of India (Sebi). The case involved alleged violations of Alternative Investment Fund (AIF) regulations, and a settlement amount of Rs 36 lakh was paid.

The investment manager and its fund had voluntarily sought settlement under Sebi's rules, thus averting further enforcement actions. This follows Sebi's findings which highlighted issues of conflict of interest in investments made by the fund in non-convertible debentures of Acme Realties and Ascent Construction.

Despite the settlement, Sebi noted inaccuracies in the fund's compliance test report for 2016-17 and expressed concerns over the bypassing of internal conflict resolution procedures. While the agreement concludes the immediate case, Sebi reserves the right to act if future discrepancies are discovered.

(With inputs from agencies.)