Adjudication Order in the matter of Exfinity Technology Fund

What is this order about?

This order addresses violations of SEBI's Alternative Investment Fund (AIF) Regulations by Exfinity Technology Fund and related entities, concerning failure to wind up the fund on time, delayed filings, exceeding overseas investment limits, and failure to conduct required valuations.

Who it concerns

Exfinity Technology Fund, Exfinity Venture Partners LLP, Mr. V Balakrishnan, Mr. Shailesh Ghorpada, Mr. Chinnu Senthilkumar, Mr. Nihar Ranjan, Vistra ITCL (India) Limited

What was found or directed

• Violated regulation 29(1)(a) read with 29(5) and 29(7) by extending scheme beyond mandatory liquidation period without proper approval
• Violated regulation 28 by filing quarterly reports with delays (e.g., 8 days for March 2023)
• Violated regulation 15(1)(a) by exceeding 25% overseas investment limit (25.62% as of February 2023)
• Violated regulation 23(2) by failing to conduct half-yearly valuation for September 2023
• Failed to inform trustee (Vistra ITCL) about overseas investment breach
• Investments worth Rs. 6.34 crore (at cost) not liquidated as of December 30, 2024

Points worth noting

• Investments in overseas VCUs reached 25.62% of investible funds (Rs. 104.07 crore) on January 5, 2017
• Overseas investments exceeded 25% limit from January 5, 2017 to July 26, 2023
• Fund failed to wind up even after SEBI granted extension until April 24, 2025
• Quarterly reports filed with delays ranging from 1-8 days