SEBI cancels registration of 19 foreign venture capital investors

Venture Capital: The regulator gave the order on February 18.

The Securities and Exchange Board of India (SEBI) has canceled the registration of 19 Foreign Venture Capital Investors (FVCIs) after finding that they had become defunct and were not operating from their registered addresses.

The decision was based on their failure to comply with regulatory requirements and submit necessary reports.

Defunct Entities and Lack of Compliance

SEBI’s investigation revealed that these FVCIs had ceased operations between 2013 and 2023 in their respective jurisdictions, including Mauritius, Singapore, and Cyprus.

Several entities had failed to file their mandatory quarterly reports, with six never submitting any, and four last filing reports as far back as FY13.

Among the 19 entities whose registrations were revoked were prominent names such as:

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• Axis Capital Mauritius
• Axis India Infrastructure Holdings
• Blackstone Capital Partners (Singapore) VI FVCI Pte. Ltd
• Blackstone Family Investment Partnership (Singapore) VI-ESC FVCI Pte. Ltd

Regulatory Findings and SEBI’s Order

In an order issued on February 18, SEBI’s Chief General Manager, G Ramar, highlighted that the entities were not engaged in FVCI activities and had shown no interest in continuing their registration. The order further noted that these FVCIs did not inform SEBI about changes in their regulatory status after becoming defunct.

Out of the 14 entities for which data was available:

• 11 had been defunct for more than five years.
• 3 had ceased operations between 10 months and three years ago.

Implications for the Investment Landscape

The cancellation of these registrations underscores SEBI’s strict stance on regulatory compliance and transparency. The move is expected to enhance oversight and ensure that only active and compliant foreign investors operate in the Indian venture capital ecosystem.