Areion Assets Management, 2 others settle AIF violation case with Sebi

Areion Assets Management, its official Dinesh Kumar Kanodia and Areion Special Situation Fund have settled a probe by the Sebi in a case pertaining to the alleged violation of alternative investment funds (AIF) rules after paying Rs 16.08 lakh towards the settlement charges.

The case related to Areion Special Situation Infra Scheme (ASSIS) allegedly taking exposure to a single entity by routing it through five different trusts. The total investment across five trusts (with exposure to the same entity) was 25.58 per cent of investable funds, which was beyond the concentration limit under the AIF norms, according to a Sebi order.

Therefore, Areion Special Situation Fund allegedly violated the Code of Conduct of AIF Regulations.

Also, Areion Asset Management (Manager) was allegedly responsible for making investment decisions and was required to comply with the provisions of AIF regulations, fund documents and applicable laws, however, it allegedly failed to comply with the rules as ASSIS breached the concentration limit from March 2022 to April 2023. Therefore, it allegedly violated the norms.

In addition, Kanodia, a key managerial personnel (KMP) of Areion Asset Management was allegedly responsible for making investment decisions as he was a sole member of the Investment Committee that approved the investment decisions of ASSIS and he was required to comply with all applicable laws, however, he allegedly failed to do so.

The order came after the Noticees (Areion Assets Management, its official Dinesh Kumar Kanodia and Areion Special Situation Fund) proposed "to settle the instant proceedings initiated against them, without admitting to or denying the findings of facts and conclusions of law" through a settlement order and filed settlement applications.

After Areion Assets Management, its official Kanodia and Areion Special Situation Fund paid the settlement amount, Sebi in a settlement order passed on April 29, said "the instant adjudication proceedings initiated against the noticee show cause notice (SCN) dated October 18, 2023, is disposed of".