The Securities and Exchange Board of India (SEBI) has imposed a penalty of ₹1 crore on Unitech Advisors (India) Pvt Ltd (now known as Auram Asset Management Private Ltd) for failing to wind up three real estate funds years ago, despite several extensions.

The regulator has also imposed a total of ₹10-lakh penalty on its directors, Ajay Chandra, Sanjay Chandra, Ramesh Chandra, Hitendra Malhotra and Deepak Bajaj, a director at Unitech Realty Investors (India) Pvt Ltd, and a nominee of Unitech Advisors on the investment committee of the fund house. They have also been barred from markets for two years.

SEBI has also slapped a penalty of ₹10 lakh each on the fund house’s three trustees — Vijay Tulshyan, Mahesh Kumar Sharma and Rakesh Dhingra. They were also barred from taking new assignments as trustees of AIF of any category for one year.

The market regulator had received complaints between May 30, 2011, and January 28, 2022, against CIG Realty Fund, a SEBI-registered venture capital fund (VCF) with respect to Schemes I, II and IV.

SEBI has found a number of violations by the fund house including investing investors’ monies in its group companies, making bad investment decisions, and not returning the money of a majority of its investors.

The inspection revealed that out of the corpus of ₹64.85 crore of the Scheme-IV, VCF-CIGRF had invested ₹51.90 crore in Unitech Ltd, SEBI said. It was further observed that the fund has failed to wind up/liquidate all the three schemes even after the tenure of the fund was over and thus, alleged that it failed to provide exit to the investors/contributors.

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These individuals have also been barred from associating themselves with any SEBI-registered intermediary, including registered funds such as MFs, Alternative Investment Funds, Portfolio Management Services, etc. which deal with investors’ money in any manner for two years, the order said.

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“The direction for winding up and for providing exit to investors/unit holders does not preclude the investors/unit holders of the fund to pursue other legal remedies available to them under any other law, against the fund and/or the Noticees regarding their investment or deficiency in service before any appropriate forum of competent jurisdiction,” SEBI further said.

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