ICICI Venture settles cases against real estate fund with SEBI
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Private equity firm ICICI Venture Funds Management Co. Ltd has paid about Rs 5.22 crore ($728,000) to settle five cases related to one of its earliest funds with the Securities and Exchange Board of India.

The cases pertain to the firm’s first real estate fund that raised capital in 2005-06 and made 13 investments, mostly in land parcels. The fund has fully exited its investments and returned to the investors an amount slightly higher than the principal amount raised, a person familiar with the matter told VCCircle.

In 2014, a clutch of non-resident Indian investors, worried that their investments were sinking due to a lack of exits, had demanded that the PE firm compensate them with $103 million. The investors had also filed a case with the Supreme Court of Mauritius against ICICI Venture.

That same year, ICICI Venture initiated a liquidity scheme for retail investors who had invested in the real estate fund, allowing them to exit their investment roughly at principal. Only a portion of retail limited partners, or investors, took up ICICI Venture’s offer. The legal case was later squashed in Mauritius.

According to SEBI’s settlement order, the investors had alleged that they had lack of clarity, inadequate information and not enough time for adequate follow-up about their investments with the fund. The SEBI order refers to five entities linked to the PE firm’s first real estate fund.

The investors had also alleged that ICICI Venture misled them or concealed information, didn’t do proper due diligence and obtained extension of the fund life in a fraudulent manner, the SEBI order shows.

SEBI had revived a set of cases against ICICI Bank group companies, including ICICI Venture and ICICI Securities Ltd, in April last year, the order shows.

ICICI group didn’t contest any of the cases and instead opted for a settlement, the person cited above said. On November 27, SEBI had filed a settlement order related to ICICI Securities.

ICICI Venture said in a separate statement that, as per SEBI's settlement process, the allegations have been neither accepted nor rejected and the proceedings have been closed. “This brings the matter to rest.”

The PE firm is currently raising its third real estate fund. VCCircle reported last month that it was gearing up to hit the final close of the third real estate fund, which makes debt investments in affordable housing projects.

Overall, ICICI Venture has raised about $4.3 billion across four verticals including PE and real estate, its website shows. 

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