Unifi Capital, 7 individuals pay Rs 38 lakh to settle case with Sebi

Unifi Capital and seven individuals have settled with capital markets regulator Sebi a case pertaining to the alleged violation of AIF rules on payment of Rs 38 lakh.

The individuals are: Sarath Chandra Reddy Kakani, Krishnamurthy Narendranath, Govindasamy Maran, Christopher Vinod, Sandeep Nadigadda Reddy, M S Sundararajan and Rajgopalan Santhanam, Sebi said in the order. 

The order came after the noticees proposed to settle the instant proceedings "without admitting or denying the findings" through a settlement order.

The adjudication proceedings initiated against the noticees (Unifi Capital, Kakani, Narendranath, Maran, Vinod, Reddy, Sundararajan and Santhanam) vide show cause notice dated October 19, 2022 is disposed of, Sebi's Adjudicating Officer Biju S said in the settlement order passed on Tuesday.

In the show cause notice (SCN) issued to the noticees, it was alleged that Unifi runs a category III AIF, in which it invested in the mutual funds categorised as large capital funds in violation of AIF norms.

As per the norms, AIFs have to invest in securities listed or unlisted companies or derivatives or complex structured products, as per Sebi.

Also, the regulator alleged that the AIF failed to disclose to the investors the level of leverage arising from position held in futures as on June 30, 2020.

Further, the AIF had allegedly delayed the implementation of guidelines of Sebi's redressal of investor grievances through the SCORES platform, the order said.

Subsequent to the issuance of the SCN, the noticees filed settlement applications with Sebi, which recommended to settle the matter on payment of Rs 38 lakh (including the amount for settlement of suo moto application filed by Unifi AIF), it added.

Consequently, the noticees paid the amount and settled the case with Sebi.