NEW DELHI: HDFC Property Fund and HDFC Capital Advisors have reached a settlement over a regulatory violation with Sebi, amounting to Rs 26 lakh.
The case involved delays in the asset liquidation process and the distribution of proceeds.
This delay in winding up the schemes is a violation of Sebi’s Venture Capital Funds rules.
According to a Sebi settlement order issued on Thursday, HDFC Property Fund and HDFC Capital Advisors submitted suo motu settlement applications, proposing to resolve the matter “without admitting or denying the findings of facts and conclusions of law”.
HDFC Property Fund initiated two schemes: the HDFC India Real Estate Fund (HIREF) and the HDFC IT Corridor Fund (HITCF).
Both schemes were established for seven years, with an option for two one-year extensions. HIREF was launched on July 18, 2005, while HITCF followed on July 29, 2005.
For HIREF, Sebi noted that the extended tenure ended on June 17, 2014. However, the fund completed asset liquidation and distribution of proceeds on March 31, 2021, resulting in a delay of approximately seven years.
Additionally, the fund retained Rs 5.33 crore for contingent liabilities, which it distributed to investors on March 25, 2025.
Similarly, for HITCF, which also had an extended tenure ending on June 28, 2014, the fund completed its liquidation and distribution process on March 28, 2014.
However, it retained a residual sum of Rs 0.89 crore for contingent liabilities, distributed to investors on March 25, 2025.
After discussions with the regulator’s committees, HDFC Property Fund and HDFC Capital Advisors agreed to the Rs 26 lakh settlement.
Sebi stated, “It is hereby ordered that any proceedings for the violations are settled concerning the applicants.”
It was also noted that HDFC Capital Advisors became the investment manager for HDFC Property Fund as of May 2, 2023, due to internal restructuring within the HDFC group, a necessary step for the merger of HDFC with HDFC Bank.
HDFC Capital Advisors fully distributed the retained funds (held by the previous investment manager) to investors in March 2025, aiming for a ‘nil’ balance in both schemes’ bank accounts.
Sebi clarified that HDFC Capital Advisors had no role in the operations and decision-making regarding the schemes covered by the current settlement applications.
