SEBI Settles ₹25.50 Lakh Case Against Unicorn India Ventures Over AIF Investment, Disclosure Lapses

On 4 May, the Securities and Exchange Board of India (SEBI) disposed of proceedings through a settlement order, resolving alleged violations of the SEBI (Alternative Investment Funds) Regulations, 2012 by Unicorn India Ventures Fund III, its manager, and key managerial personnel, after the parties opted for settlement under SEBI's regulatory framework.

SEBI Whole Time Members Kamlesh Chandra Varshney and Amarjeet Singh approved the settlement and closed the enforcement proceedings arising from the alleged regulatory breaches. They held:

"...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 Notices were issued, are hereby settled in respect of the Applicants..."

SEBI alleged that Unicorn India Venture Debt Fund-I, a Category II Alternative Investment Fund, temporarily invested in Aditya Birla Sun Life Savings Fund Regular Growth Plan, which SEBI did not treat as a permitted liquid mutual fund instrument for parking uninvested funds. SEBI stated that this placement contravened the requirement that uninvested AIF funds must be deployed only in liquid instruments or other permitted avenues.

The regulatory body further noted that the fund did not disclose this deviation in its Compliance Test Report for the financial year 2023–24. The fund later corrected the deployment by shifting the investment into a liquid mutual fund scheme.

Based on these findings, SEBI recorded violations of the AIF regulatory framework against the fund, its manager, and key managerial personnel. It thereafter issued settlement notices, pursuant to which the applicants filed settlement applications and remitted Rs. 25.50 lakh in total.

SEBI accepted the settlement terms and disposed of the proceedings without initiating further enforcement action for the stated violations. It clarified, however, that the settlement remains without prejudice to its right to initiate proceedings in case of any misrepresentation, breach of settlement terms, or violation of conditions.