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Indiabulls Asset Management Company, now operating as Groww AMC, has resolved a long-standing regulatory case with the Securities and Exchange Board of India (SEBI) by paying INR 1.43 crore. The case relates to alleged violations of Alternative Investment Fund (AIF) regulations dating back to 2017, including pledging scheme assets for loans, not adhering to investment concentration limits, and misrepresenting financial information. The settlement was reached without admitting or denying the findings, allowing the company and its schemes to move past regulatory scrutiny while complying with SEBI's requirements.
Indiabulls Asset Management Company, which has been acquired and rebranded as Groww AMC, has settled a case with the Securities and Exchange Board of India (SEBI) related to alleged breaches of Alternative Investment Fund (AIF) regulations. The settlement, confirmed earlier this week, involved a total payment of INR 1.43 crore by Indiabulls AIF, Indiabulls Dual Advantage Real Asset Fund (IBDARA), Indiabulls Real Estate Fund (IBREF), and former executives Ambar Maheshwari, Amit Jain, and Parth Muria. Advertisement
The case traces back to 2017 when the entities were accused of multiple regulatory lapses. SEBI had issued show-cause notices in September last year, highlighting issues such as pledging IBDARA scheme assets for loans taken by an investee company, failing to draw down equal percentages of commitment across all unit classes, breaching concentration limits in investee companies for both IBREF and IBDARA, and not following proper valuation frequency for these schemes. SEBI also noted that the applicants misrepresented financial information in the valuation of IBDARA and submitted inaccurate details in their Compliance Test Reports (CTR). The regulator had earlier issued a deficiency letter post inspection conducted in FY 2015 advising the fund to conduct bi-annual valuations of its securities.
In 2023, Groww, a fintech company, acquired Indiabulls AMC, which at that time managed three business verticals: mutual fund, AIF, and portfolio management services. Following the acquisition, the entities applied for a settlement with SEBI under its Settlement Regulations, resolving the proceedings without admitting or denying the regulator's findings. SEBI formally accepted the settlement and disposed of the adjudication proceedings.
This settlement allows the involved parties to conclude the matter efficiently and focus on ongoing operations under Groww AMC while adhering to regulatory compliance. It also reinforces SEBI's role in ensuring that asset management firms maintain transparency, proper valuation practices, and adherence to concentration limits and other fund management norms.
Source PTI
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