K Raheja Investment Pays Rs 68.73 Lakh to Settle REIT Norms Violation Case with Sebi

K Raheja Investment Managers resolved a case with the Securities and Exchange Board of India (Sebi) by paying a settlement fee of Rs 68.73 lakh. This case involved alleged breaches of REIT regulations concerning Mindspace Business Parks REIT. The company, now known as K Raheja Corp Investment Managers Pvt Ltd, manages Mindspace Business Parks REIT, which was listed on Indian stock exchanges in August 2020.

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Mindspace Business Parks REIT, backed by the K Raheja Corp group, holds office properties in Mumbai, Pune, Hyderabad, and Chennai. Sebi had started adjudication proceedings against K Raheja Investment Managers LLP for purportedly violating REIT rules. A show cause notice was issued to them on August 24, 2023, highlighting alleged errors in calculating net distributable cash flows (NDCF) at the Special Purpose Vehicle (SPV) level.

Settlement Process and Allegations

The notice also accused K Raheja Investment Managers of making incorrect and incomplete NDCF disclosures in their half-yearly and annual reports. It was further alleged that despite negative cash balances at the SPV level, NDCF distributions were made to the REIT by borrowing funds, which were then distributed to unit holders. The company proposed to settle these proceedings without admitting or denying any findings.

Upon receiving the settlement application from K Raheja Investment Managers, Sebi's High Powered Advisory Committee (HPAC) approved revised settlement terms. Following this approval, the company paid the settlement fee to resolve the matter with Sebi. The adjudicating officer for Sebi, Asha Shetty, confirmed that the proceedings initiated on August 24, 2023, were concluded based on the settlement terms.

Conclusion of Proceedings

The resolution of this case signifies compliance with regulatory norms by K Raheja Investment Managers. By settling with Sebi, they have addressed the alleged violations related to Mindspace Business Parks REIT. This step ensures that the company can continue its operations without further legal complications regarding this matter.