SEBI settles operations against Gaja Capital, SBI Macquarie, ASK Real Estate, SIDBI SME and Kotak India
The matter arose after the introduction of the Alternative Investment Funds Regulations that replaced the Venture Capital
By: : Anjali Verma
Update: 2026-03-09 13:45 GMT
SEBI settles operations against Gaja Capital, SBI Macquarie, ASK Real Estate, SIDBI SME and Kotak India
The matter arose after the introduction of the Alternative Investment Funds Regulations that replaced the Venture Capital Funds Regulations
The Securities and Exchange Board of India (SEBI) has settled enforcement proceedings with 29 venture capital funds (VCFs), including Gaja Capital, SBI Macquarie, ASK Real Estate, SIDBI SME Venture and Kotak India Venture, which failed to liquidate investments after the expiry of their schemes’ tenure.
The market regulator stated, “In view of the settlement,” no enforcement action against the applicants will be taken for the identified defaults.
The settlement amount, ranging from Rs.2 lakh to Rs.9 lakh, was carried out under the Venture Capital Fund Settlement Scheme, 2025. It was introduced to resolve regulatory violations linked to legacy VCFs that continued to hold unliquidated investments beyond their permitted liquidation period.
The matter arose after the introduction of the Alternative Investment Funds (AIF) Regulations, 2012, which replaced the Venture Capital Funds Regulations, 1996.
While existing VCFs were allowed to continue under the old framework until their schemes expired, several funds failed to liquidate investments even after their liquidation period ended.
Thus, to address the situation, SEBI amended the AIF framework in 2024 to allow VCFs to migrate to the AIF regime. It offered mechanisms to deal with unliquidated assets.
However, the schemes that continued beyond their liquidation period were considered non-compliant with Regulation 23(1) read with Regulation 17(1) of the erstwhile VCF Regulations.
Subsequently, SEBI introduced the VCF Settlement Scheme, 2025, providing eligible VCFs an opportunity to settle potential enforcement proceedings. They were allowed to submit settlement applications and pay the prescribed settlement amounts.
Under the order, 29 VCFs availed of the scheme and remitted the settlement amounts after a public notice was issued on 15 July 2025.