SEBI adjudicates Catalyst Trusteeship for delayed action on Srivatsa Encivil default

SEBI examined whether the trustee complied with regulations regarding notifying investors, sharing information with credit rating agencies, issuing press releases, and updating default databases.

Who it concerns: Catalyst Trusteeship Limited (Debenture Trustee); Srivatsa Encivil Pvt. Ltd. (Issuer); Edelweiss India Real Estate Fund and Edelweiss Alternative Asset Advisors Limited (Debenture Holders).

What SEBI found or ordered

• SEBI alleged Catalyst failed to issue a notice to debenture holders within 3 days of the default event (June 30, 2024).
• SEBI alleged Catalyst shared incorrect information with Credit Rating Agencies (CRAs), stating payment was timely when it was delayed.
• SEBI alleged Catalyst failed to issue a press release within one day of the default event (issued on July 12, 2024 instead).
• SEBI alleged Catalyst failed to update the default history on the India BondInfo database within 7 days of knowledge of the default.
• The inspection period covered July 31, 2022, to July 31, 2024.
• The specific default involved Non-Convertible Debentures (NCDs) with ISINs INE0K8T07024 and INE0K8T07032.

Also in the document

• The issuer involved, Srivatsa Encivil Pvt. Ltd., is a private entity, and the debenture holders were institutional investors from the same group (Edelweiss).
• Catalyst argued in its reply that the delay was due to specific instructions from the institutional debenture holders to act only upon their direction, which SEBI noted in the Show Cause Notice.
• The order text provided is truncated and does not contain the final penalty amount or the Adjudicating Officer's final decision on the allegations.