Foreign portfolio investor Emerging India Focus Funds has settled a case relating to alleged violations of FPI rules with capital markets watchdog Sebi after paying Rs 64.35 lakh as settlement charges.

In a rectification to its settlement order, Sebi on Tuesday said the matter relates to non-compliance with the “fitness and honesty” criteria for the period October 13, 2022 to April 11, 2023.

The latest order came after the petitioner filed an application with Sebi proposing to settle the proceedings initiated against him, “without admitting or denying the findings of fact and conclusions of law” through a settlement order .

The Securities and Exchange Board of India (Sebi) initiated adjudication proceedings against the petitioner and issued a show cause notice in February for the alleged violations of the FPI regulations and intermediary regulations.

While awaiting the judgment proceedings, Emerging India Focus Funds filed an application with Sebi and paid Rs 64.35 lakh on November 13 to settle the alleged violations.

“In view of acceptance of the terms of the settlement and receipt of the settlement amount by Sebi, the ongoing judgment proceedings initiated against the plaintiff through SCN (show cause notice) dated February 29, 2024 are closed,” a Sebi said in its order. adopted Monday.

The SCN was issued to the applicant due to the revocation of the license of its majority shareholder – Emerging India Fund Management Ltd – by the Mauritian financial regulator, the Financial Services Commission (FSC), after which the applicant was not in compliance with the criteria of fitness and good repute. criteria for the period from October 13, 2022 to April 11, 2023.

Further, the applicant did not immediately inform Sebi and the designated depository participant about the change in its eligibility status.

EIFF only replaced the majority shareholder with a new competent entity in April 2023, sources said.

Thus, between April 2022 and April 2023, EIFF violated Sebi regulations and a formal notice was duly served on them. This matter is now duly settled.

EIFF has only been investing in mutual funds in India since November 2021.

Emerging India Focus Funds was named in the Hindenburg Research report, which alleged that the fund was used to inflate the volume as well as the price of Adani group companies.

Sources familiar with the matter said the matter that was settled with Emerging India Focus Funds (EIFF) has nothing to do with the Adani or Hindenburg report relating to the coercive measures taken by Sebi.

Concretely, this case is not one of the 24 cases reported to the committee of experts set up by the Supreme Court after the Hindenburg report of January 2023.