The Securities and Exchange Board of India (Sebi) has settled a case with two entities of Edelweiss, a financial services company, over alleged violations of alternative investment fund (AIF) rules. The two entities, Edelweiss Stressed and Troubled Assets Revival Fund Trust and Edelweiss Alternative Asset Advisors Ltd, have collectively paid Rs 61.4 lakh as settlement charges.
In addition to the settlement amount, Sebi has also imposed a restriction on the officers-in-default of the two entities, directing them not to engage with the company for a period of 12 months. This decision was made by Sebi’s adjudicating officer, Sudeep Mishra, in an order issued on Tuesday.
The case originated from complaints filed on Sebi’s online grievance platform, SCORES, which alleged lapses in governance and conflict management against the Edelweiss-managed AIF. Sebi’s investigation found that Edelweiss Stressed and Troubled Assets Revival Fund Trust had failed to act in the interest of investors and did not exercise independent professional judgment, thereby violating Sebi norms.
The two Edelweiss entities had filed settlement applications with Sebi, proposing to resolve the proceedings without admitting or denying the findings of fact and conclusions of law. Sebi accepted the settlement applications and disposed of the adjudication proceedings, bringing the case to a close.
The settlement amount of Rs 61.4 lakh and the 12-month restriction on the officers-in-default are intended to hold the Edelweiss entities accountable for their alleged violations of AIF rules. The case highlights the importance of governance and conflict management in the alternative investment fund industry and the need for entities to prioritize the interests of investors.
Sebi’s decision to settle the case with the Edelweiss entities demonstrates the regulator’s commitment to ensuring compliance with securities laws and protecting the interests of investors. The settlement also serves as a reminder to other entities in the industry to adhere to Sebi norms and guidelines to avoid similar actions in the future.