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AIFs hold Rs.180-Cr in liquidation proceeds despite exit plans due to pending issues

Business Standard  

Several alternative investment funds (AIFs) that applied to surrender their registrations with the Securities and Exchange Board of India (Sebi) are continuing to hold nearly INR 180 crore in liquidation proceeds beyond the permissible period, citing pending litigation, tax demands, and residual operational liabilities.In its March board meeting, Sebi approved amendments to AIF regulations to address such situations, allowing schemes to retain liquidation proceeds even after their tenure expires under specified conditions.The regulator also plans to introduce a framework to classify such entities as “inoperative funds”, with lighter compliance requirements until their registration certificates are formally surrendered.According to the agenda papers from a Sebi board meeting, INR 112 crore across five cases is being retained due to ongoing litigation or tax demands, while INR 21 crore in one case is held in anticipation of such liabilities. Additionally, INR 45.4 crore across eight cases has been retained to meet residual operational expenses.