HDFC Property Fund and HDFC Capital Advisors have resolved a case concerning the breach of venture fund regulations with SEBI by paying Rs 26 lakh. The issue revolved around delays in asset liquidation and proceeds distribution, violating SEBI’s Venture Capital Funds rules. Both entities filed settlement applications with SEBI, neither admitting nor denying the findings.
SEBI highlighted that HDFC Property Fund managed two schemes, HDFC India Real Estate Fund (HIREF) and HDFC IT Corridor Fund (HITCF). These schemes, initially set for seven years with possible extensions, faced delays in winding up. For instance, HIREF’s extended tenure ended on June 17, 2014, but asset liquidation completed on March 31, 2021, after a seven-year delay.
In a similar scenario, HITCF’s extended tenure ended on June 28, 2014, but asset liquidation concluded on March 28, 2014. The funds retained residual amounts for contingent liabilities, distributing them to investors in March 2025. Following discussions, HDFC Property Fund and HDFC Capital Advisors agreed to pay Rs 26 lakh as part of the settlement with SEBI.
SEBI’s order stated that any potential proceedings for the violations are settled concerning the applicants. It was mentioned that HDFC Capital Advisors took over as the investment manager for HDFC Property Fund in May 2023 due to internal restructuring within the HDFC group. The retained amounts were distributed to achieve a ‘nil’ balance in the schemes’ bank accounts. SEBI clarified that HDFC Capital Advisors had no involvement in the schemes’ operations or decision-making related to the settlement applications.
