SEBI Revokes Registration of 19 Foreign Venture Capital Investors

The Securities and Exchange Board of India (SEBI) has revoked the registration of 19 foreign venture capital investors (FVCIs), including entities based in Mauritius, Singapore, and Cyprus, due to violations of regulatory norms.

SEBI discovered multiple instances of non-compliance and classified these entities as defunct.

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Out of the 14 entities with known strike-off dates, 11 had been inactive for over five years, while the remaining three had been defunct for durations ranging from 10 months to three years in their respective jurisdictions. In December 2024, SEBI issued show-cause notices to these 19 firms; however, none of them responded.

Custodians confirmed to SEBI that these entities did not hold any securities in India. The regulator asserted that these firms no longer met the requirement of being incorporated outside India since they had ceased to exist in their respective jurisdictions. Additionally, they failed to submit quarterly reports and did not notify SEBI about changes affecting their eligibility.

Non-Compliance with Reporting Obligations

SEBI’s investigation revealed that these entities had lost their legal standing and failed to submit their quarterly reports.

None of the firms provided data on the SEBI Intermediaries (SI) portal for four consecutive quarters, from March 2023 to December 2023. Furthermore, six entities had never submitted any reports, while four had last reported their data as far back as the 2012–13 financial year.

Failure to Respond to Regulatory Notices

The market regulator also found that the firms did not update their eligibility status. SEBI made several attempts to reach these entities but was unable to establish contact. Despite issuing show-cause notices, none of the firms provided a response.

Given their prolonged non-compliance and failure to meet regulatory requirements, SEBI decided to cancel their registrations. This action reflects the regulator’s firm stance on ensuring transparency and compliance within the capital markets.

Of the 14 entities with known strike-off dates, 11 had been inactive for over five years, while the remaining three had been inactive for periods between 10 months and three years. Although SEBI issued show-cause notices to these 19 entities in December 2024, none of them responded.

In its ruling, SEBI emphasized that FVCIs were obligated to disclose the discontinuation of their activities, as it constitutes material information. The regulator’s notice pointed out that these firms were not found at their registered addresses, suggesting they failed to communicate address changes to SEBI and did not comply with periodic reporting requirements under FVCI regulations.

Some of the entities whose FVCI registrations have been revoked:

• Axis Capital Mauritius
• Axis India Infrastructure Holdings
• Blackstone Capital Partners (Singapore) VI FVCI Pte Ltd
• P6 Asia Holding Investments (Cyprus) Ltd
• Pequot India Mauritius IV Ltd
• Omega FVCI Investments Pte Ltd
• IFCI Sycamore India Infrastructure Fund
• Blackstone Family Investment Partnership (Singapore) VI-ESC FVCI
• Summit Partners India Venture Capital Investments
   

SEBI’s action against these FVCIs underscores its commitment to upholding regulatory integrity in India’s capital markets. The firms’ failure to meet reporting obligations and respond to regulatory inquiries ultimately led to their deregistration, reinforcing the critical role of transparency and compliance in the financial sector.