New Delhi, Private credit platform Modulus Alternatives Investment Managers has settled with capital markets regulator Sebi a case related to alleged violations of AIF norms by paying Rs 10.87 lakh towards settlement charges.
The proceedings pertained to an alleged contravention of AIF (Alternative Investment Funds) rules relating to the investment manager’s obligation to maintain its continuing interest in the fund on a pro-rata basis with other investors.
The regulator observed that it examined the quarterly activity reports of India Credit Opportunities Fund II, a Category II AIF managed by Modulus Alternatives Investment Managers Ltd, and found that the drawdowns made by the investment manager were not proportionate to those made by other investors.
This led to a breach of maintaining continuing interest criteria by the investment manager (Modulus Alternatives Investment Managers Ltd) under AIF regulations, the Securities and Exchange Board of India (Sebi) said in the order passed on Monday.
Thereafter, Modulus Alternatives Investment Managers filed a suo motu settlement application under the Sebi’s (Settlement Proceedings) Regulations, 2018 proposing to settle the matter without admitting or denying the findings.
Following deliberations by Sebi’s Internal Committee and the High Powered Advisory Committee, Modulus Alternatives paid Rs 10.87 lakh towards settlement amount which was confirmed by the regulator on May 25, 2026.
“… it is hereby ordered that any proceedings that may be initiated for the violations as mentioned… are settled in respect of the applicant (Modulus Alternatives Investment Managers),” Sebi’s Whole Time Members Kamlesh Chandra Varshney and Amarjeet Singh said in the order.
As per the order, Sebi said it would not initiate enforcement action for the alleged violations.
However, the regulator clarified that it retains the right to take further action if any misrepresentation is discovered or if the company breaches any terms of the settlement.
