Motilal Oswal Entities Settle SEBI Case for ₹38.76 Lakh over AIF Violations
Moneylife Digital Team 21 April 2026
Motilal Oswal Entities have settled a case with the market regulator Securities and Exchange Board of India (SEBI) by paying ₹38.76 lakh, in connection with alleged violations of alternative investment fund (AIF) regulations.
 
The settlement follows suo motu applications filed by Motilal Oswal Alternative Investment Trust and Motilal Oswal Asset Management Company Ltd under SEBI’s Settlement Regulations, 2018, proposing to resolve the matter without admission or denial of findings. The regulator had observed multiple lapses in compliance with AIF norms, including issues related to investor handling, internal processes, and governance standards.
 
According to SEBI’s findings, the AIF had retained ₹8.69 crore from 109 defaulting investors out of ₹35.17 crore paid, representing nearly 25% of the invested amount. This included taxes already remitted to the government. Additionally, the investment manager was found to have appropriated penal exit loads instead of crediting them to the scheme for the benefit of other investors.
 
The regulator also flagged a case of wrongful liquidation of an investor’s portfolio due to coordination failures between internal teams. Although the account was later reinstated, SEBI noted that a deficiency in investor service had occurred.
 
Further, the AIF was found lacking in a formal framework governing distributors, including absence of a code of conduct and failure to act on complaints related to mis-selling or investor defaults.
 
Following discussions with SEBI’s internal committee(IC) and subsequent revisions to settlement terms, the entities proposed a payment of ₹38.76 lakh. The high-powered advisory committee recommended acceptance of the proposal, which was later approved by SEBI’s panel of whole time members. The settlement amount was remitted on 27 February 2026.
 
Under the terms of the order, SEBI will not initiate enforcement proceedings for the cited violations. However, the regulator has reserved the right to reopen the case if any misrepresentation is discovered or if settlement conditions are breached.
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