HDFC Property Fund, HDFC Capital Advisors Settle Proceedings Over Delayed Winding Up Of Venture Capital Schemes

HDFC Property Fund and HDFC Capital Advisors Limited have settled proceedings before the Securities and Exchange Board of India (SEBI) by paying ₹26.01 lakh in a matter concerning the delayed winding up of two venture capital fund schemes.

The settlement order was passed by SEBI Whole Time Members Amarjeet Singh and Kamlesh C. Varshney after the entities filed suo motu settlement applications under the SEBI (Settlement Proceedings) Regulations, 2018. The applicants proposed to settle the matter without admitting or denying the findings of fact or conclusions of law.

The proceedings arose from alleged violations of Regulation 24(2) of the SEBI (Venture Capital Funds) Regulations, 1996. SEBI noted that HDFC Property Fund had launched two schemes, namely, HDFC India Real Estate Fund and HDFC IT Corridor Fund, with an initial tenure of seven years and provision for extension.

According to SEBI, the extended tenure of both schemes expired in June 2014. It noted that there was delay in winding up of the Schemes and distribution of proceeds to its investors.

During the settlement proceedings, HDFC Capital Advisors Limited stated that it had assumed the role of investment manager of HDFC Property Fund only in May 2023 as part of an internal restructuring. It further stated that it had no role in the operation or decision making with respect to the schemes.

After considering the recommendations of SEBI's Internal Committee and the High Powered Advisory Committee, the Panel of Whole Time Members approved settlement of the proceedings on payment of ₹26.01 lakh by the applicants.

The regulator said that no enforcement proceedings would be initiated against HDFC Property Fund and HDFC Capital Advisors Limited in relation to the alleged violations, subject to the terms and conditions contained in the settlement order.