SEBI Passes Settlement Order: Baring Private Equity India to Pay Rs. 16.75 Lakh for alleged Flouting of AIF Rules

SEBI Passes Settlement Order: Baring Private Equity India to Pay Rs. 16.75 Lakh for alleged Flouting of AIF Rules

The Securities and Exchange Board of India (SEBI) passed a settlement order in respect of Baring Private Equity India Investment Manager LLP for alleged flouting of Alternate Investment Funds Rules (AIF) and observed the that adjudication proceedings against Baring Private Equity India Investment Manager LLP vide Show Cause Notice dated 12th May, 2022 is disposed of.

The SEBI had initiated adjudication proceedings under section 15EA of Securities and Exchange Board of India Act, 1992 (SEBI Act) against of Baring Private Equity India Investment Manager LLP ((hereinafter referred to as Noticee) for alleged violation of regulation 15(1)(d) read with regulation 20(5) of SEBI (Alternate Investment Funds) Regulations, 2012 (AIF Regulations).

A Show Cause Notice (SCN) dated 12th May, 2022 was issued to Noticee in terms of the provisions of Rule 4 of the Adjudication Rules, 1995 calling upon the Noticee to show cause why an inquiry should not be held and penalty not be imposed, under section 15EA of SEBI Act for the alleged violation of the aforesaid provisions.

Pending Adjudication Proceedings, the Noticee proposed to settle the instant proceedings initiated against it, without admitting or denying the findings of facts and conclusions of law, through a settlement order and filed a settlement application with SEBI bearing Settlement Application dated 23rd August, 2022 in terms of the provisions of SEBI (Settlement Proceedings) Regulations, 2018 (hereinafter referred to as "Settlement Regulations").

The High-Powered Advisory Committee (hereinafter referred to as 'HPAC') in its meeting held on 6 December, 2022, considered the settlement terms proposed and recommended that the case may be settled upon payment of Rs. 16,57,500 by the Noticee as settlement amount towards the settlement terms.

Further, in the meeting held on 27th December, 2022, the HPAC was apprised that no action was taken against any officer-in-default. HPAC, thereafter, agreed with the recommendation with a suggestion that the applicant may be directed to recover the settlement amount from the officer-in-default so that the investors are not penalized.

The Panel of Whole Time Members of SEBI approved the said recommendation of the HPAC on 20th January, 2023 and the same was communicated by SEBI to applicant on 30th January, 2023.

The Company was further apprised that the Competent Authority had directed that the payment of the settlement amount be recovered from the officer-in-default so that the investors are not penalized. Following which the Company, remitted the amount and settled the case with the capital markets watchdog.