The matter concerns Harbourfront India Fund, a category II AIF registered with SEBI. Based on its examination of the Fund's quarterly activity reports and subsequent replies, SEBI observed, prima facie, that the sponsor did not maintain the requisite continuing interest in the Fund during the period from 12 September 2023 to 11 April 2025.
At the final close of the Fund on 12 September 2023, the sponsor's commitment stood at ₹2 crore, representing 2.44% of the total corpus of ₹ 82 crore. SEBI observed that this was below the 2.5% of corpus prescribed under the SEBI (Alternative Investment Funds) Regulations, 2012.
The sponsor subsequently increased its commitment to ₹2.05 crore, equivalent to 2.5% of the corpus, through an addendum to the contribution agreement executed on 11 April 2025. SEBI, therefore, prima facie observed that the Fund remained non-compliant with the prescribed requirement from 12 September 2023 until 11 April 2025.
SEBI prima facie found Harbourfront India Trust to be in violation of Regulation 10(d) of the AIF Regulations. Harbourfront India Investment Advisory LLP was also prima facie found to have violated Regulation 20(1) read with Regulation 10(d), along with clauses 2(a) and 2(c) of the Code of Conduct for Managers and Regulation 20(5) read with Regulation 10(d) of the AIF Regulations.
The regulator also, prima facie, found Rohit Chokhani, Sho Nakagawa, and Masaki Misono, identified as KMP, to be in violation of Regulation 20(1), read with Regulation 10(d), of the AIF Regulations, as well as clauses 2(a) and 2(c) of the Code of Conduct.
SEBI issued a notice of summary settlement on 29 April 2026, informing the applicants about the alleged violations and offering them an opportunity to settle the enforcement proceedings. The notice required payment of ₹12.75 lakh, jointly and severally, within 30 calendar days of receipt of the notice.
The applicants filed their settlement application on 28 May 2026 and remitted the settlement amount of ₹12.75 lakh on the same day. SEBI confirmed receipt of the amount.
Based on the facts of the case, SEBI exercised its powers under Section 15JB, read with Section 19, of the SEBI Act, 1992, and Regulation 23 of the Settlement Regulations, to settle the specified proceedings against the applicants. SEBI said it would not initiate enforcement action against them for the violations covered by the settlement.
However, SEBI clarified that the settlement was without prejudice to its powers under Regulations 28 and 31 of the Settlement Regulations. The regulator may take appropriate action if any representation made during the settlement proceedings is subsequently found to be untrue, if the applicants breach any undertakings or waivers submitted during the proceedings, or if they fail to pay any difference arising from a discrepancy in arriving at the settlement terms.
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