SEBI Cancels Registration of 19 Foreign Venture Capital Investors Over Regulatory Violations

The Securities and Exchange Board of India (SEBI) has revoked the registration of 19 Foreign Venture Capital Investors (FVCIs) for violating regulatory norms and failing to meet eligibility criteria. These entities, based in Mauritius, Singapore, and Cyprus, were found to be defunct, with some not operating from their registered addresses. SEBI also noted that six of them never submitted quarterly reports, while four last filed reports in the 2013 financial year.

The revoked registrations include P6 Asia Holding Investments (Cyprus) Ltd, Pequot India Mauritius IV Ltd, Omega FVCI Investments Pte Ltd, Blackstone Capital Partners (Singapore) VI FVCI Pte Ltd, Axis India Infrastructure Holdings, and Axis Capital Mauritius. SEBI stated that these firms ceased operations in their respective jurisdictions between 2013 and 2023 and violated multiple provisions under the FVCI regulations.

SEBI’s inquiry revealed that the 19 FVCIs were no longer active, with several having ceased to exist in their home jurisdictions. Of the 14 entities with available strike-off dates, 11 had been defunct for more than five years, while the other three had been inactive for periods ranging from 10 months to three years. Regulatory authorities in Mauritius, Singapore, and Cyprus also confirmed that these firms were officially marked as defunct.

The market regulator had issued show-cause notices to these entities in December 2024, but none responded. SEBI further confirmed with custodians that these companies did not hold any securities in India. Additionally, the firms failed to disclose their discontinuation of activities, a critical requirement under the FVCI regulations. Several were also not found at their registered addresses, indicating that they had not updated SEBI about changes in their status.

The order, issued by SEBI’s Chief General Manager G. Ramar on February 18, emphasized that these entities had not conducted any FVCI-related activities and had barely submitted regulatory reports since their registration. This lack of compliance demonstrated their disinterest in maintaining their status as registered FVCIs. The entities also violated multiple provisions under the FVCI Regulations, 2000, including failing to meet incorporation criteria, not filing quarterly reports, and neglecting to notify SEBI about changes affecting their eligibility.

The entities facing deregistration include IFCI Sycamore India Infrastructure Fund, HS Venture Ltd, Omega FVCI Investments Pte Ltd, Summit Partners India Venture Capital Investments, Global Asia Venture Company (Mauritius), and Firstmark India Mauritius III Ltd. Others on the list are AOC Partners APGF, Asia Power FVCI Ltd, AV 2014 Global Investment Ltd, Canaan VII Mauritius, and Ecolutions Singapore Pte Ltd. The Cyprus Securities and Exchange Commission and Apex Fund Services (Mauritius) confirmed that some of these firms underwent voluntary liquidation.

The order also noted that the FVCIs did not inform SEBI when they became defunct in their home jurisdictions, failing to disclose a key regulatory change. Under Regulation 8 of the FVCI Regulations, 2000, foreign venture capital investors must be supervised by an appropriate foreign authority and notify SEBI of any updates to their registration details. These entities failed to comply, violating multiple conditions, including maintaining their legal existence, filing quarterly reports, and updating eligibility criteria.

SEBI made several attempts to reach the firms but received no responses. Verification with custodians and foreign regulators confirmed that these entities had ceased operations, with 11 of them being inactive for over five years and three others for 10 months to three years. Given these findings, SEBI concluded that the firms had failed to meet regulatory obligations and were no longer eligible to hold FVCI registrations.