New Delhi, May 22 -- The Securities and Exchange Board of India (SEBI) has cancelled the registration of three alternative investment funds (AIFs), including two managed by a unit of Brookfield-controlled Indostar Capital, for not submitting their quarterly reports in time and in the manner prescribed.
Through separate orders issued on Friday, SEBI cancelled the registrations of Indostar Credit Fund, Indostar Recurring Return Credit Fund and Ventureland Asia Advisors. This raises the count of funds whose registrations SEBI has cancelled to five in a span of two weeks.
Last week, the regulator cancelled the registration of Domus Capital and India Electronic Development Fund for similar reasons.
Indostar Credit Fund and Indostar Recurring Credit Fund are managed by IndoStar Asset Advisory Pvt Ltd, a unit of Indostar Capital. Mumbai-listed Indostar Capital is controlled by Brookfield, the Canadian investment firm which bought a majority stake in the non-bank finance company in 2020 from private equity firm Everstone.
Indostar Credit Fund, a Category II alternative investment fund, submitted to the regulator that it had sought to surrender its registration in 2022 and could not track the status of its application due to a lack of compliance personnel. But the regulator noted that the surrender application was closed because requisite information and documents were not provided to process it.
The fund added that since it had been dormant since the expiry of its tenure, its quarterly reports would not have recorded any activity, but the regulator responded that this does not exempt them from making the required submissions. This fund had raised Rs 203 crore and deployed 96% of this corpus, according to Indostar Capital's financial statement for 2015-16.
Another Category II fund, Indostar Recurring Return Credit Fund, submitted similar responses to SEBI saying that it had applied for a surrender of its registration in 2017 and 2018, but could not track the status of its application for lack of personnel. But it added that a new management team had undertaken the filing of the reports after being made aware of the show-cause notice issued by the regulator. It asked to be allowed to surrender its registration after filing the necessary reports. But the regulator, pointing out that there are no exceptions for funds which have not launched schemes, cancelled their registration.
Mumbai-based Ventureland Asia Advisors Services, which had acquired a controlling stake in the publisher of magazines like Rolling Stone India and MW (Man's World) Magazines in 2021, lost its registration because it did not have the tech personnel to upload its quarterly results through the SEBI Intermediary portal.
Ventureland merely forwarded a few Excel sheets to the regulator, and the regulator responded by saying that "mere emailing of an Excel sheet to a SEBI official does not satisfy, substitute, or discharge the statutory requirement of electronic filing through the designated portal". The regulator also noted that the fund had not made any further attempts to upload the data onto the portal.
Published by HT Digital Content Services with permission from VC Circle.