Motilal Oswal AIF Settles SEBI Proceedings Over AIF Regulation Violations, Pays ₹38.76 Lakh

Motilal Oswal Alternative Investment Trust and Motilal Oswal Asset Management Company Ltd have opted to settle a case for alleged violations of the SEBI (Alternative Investment Funds) Regulations, 2012, after paying Rs. 38.76 lakh, with the regulator disposing of the proceedings in terms of the settlement.

The matter arose from observations that the AIF had retained Rs. 8.69 crore from 109 defaulting investors as a penalty instead of crediting the same to the scheme for the benefit of other investors. It was also alleged that an investor was wrongly classified as a defaulter leading to liquidation of her portfolio, and that the AIF lacked a proper framework governing its distributors, with no action taken on mis-selling complaints.

The entities filed suo motu settlement applications under the SEBI (Settlement Proceedings) Regulations, 2018 proposing to settle the matter without admitting or denying the findings.

The High-Powered Advisory Committee recommended settlement, which was approved by SEBI's panel of Whole Time Members.

Pursuant to the approval, the entities paid a settlement amount of ₹38.76 lakhs.

In view of the settlement, SEBI ordered that enforcement proceedings for the alleged violations be settled, while clarifying that the order is without prejudice to SEBI's right to initiate action in case of any misrepresentation or breach of settlement terms.