**Edelweiss Entities Settle Sebi Case Over Alleged AIF Rule Violations**
*New Delhi:* Two Edelweiss entities have reached a settlement with market regulator Sebi in a case involving alleged violations of alternative investment fund (AIF) rules. Collectively, they paid Rs 61.4 lakh towards settlement charges.
The entities involved – Edelweiss Stressed and Troubled Assets Revival Fund Trust and Edelweiss Alternative Asset Advisors Ltd – were also directed by Sebi that their officers-in-default will be barred from engaging with the company for 12 months.
“The instant adjudication proceedings initiated against the noticees, Edelweiss Stressed and Troubled Assets Revival Fund Trust and Edelweiss Alternative Asset Advisors Ltd, vide show cause notice dated July 12, 2024, are hereby disposed of,” said Sebi’s adjudicating officer Sudeep Mishra in the order dated Tuesday.
The order followed the filing of two settlement applications by the entities, proposing to settle proceedings initiated against them through the show-cause notice issued on July 12, 2024, without “admission or denial of the findings of fact and conclusions of law.”
### Background of the Case
The case originated from complaints lodged on SCORES, Sebi’s online grievance platform, alleging lapses in governance and conflict management against the Edelweiss-managed AIF.
According to the regulator, Edelweiss Stressed and Troubled Assets Revival Fund Trust failed to act in the interest of investors and did not exercise independent professional judgment, thereby violating Sebi’s norms.
Furthermore, Edelweiss Alternative Asset Advisors Ltd was found to have failed to carry out AIF activities in accordance with the Private Placement Memorandum (PPM) and submitted inaccurate information to the trustee in the compliance test report for the financial year 2016-17, constituting further violations of AIF regulations.
Following these findings, Sebi issued a show-cause notice to the entities on July 12, 2024.
### Settlement and Corrective Actions
After receiving the show-cause notice, the entities submitted revised settlement terms. These were approved by Sebi’s high-powered advisory committee, and the settlement amount was duly paid and confirmed by the regulator.
Edelweiss also informed Sebi of corrective measures undertaken, including:
– Formation of a fund board comprising independent members
– Establishment of a governance committee to monitor conflict situations
– Imposition of a one-year ban on officers-in-default from associating with the company
Sebi emphasized that the settlement is without prejudice to its right to reopen the matter should any disclosures be found false or incomplete.
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https://www.freepressjournal.in/business/two-edelweiss-entities-settle-alternative-investment-fund-rules-violation-case-with-sebi-after-paying-614-lakh-settlement-charge