Authority: Securities and Exchange Board of India (SEBI)

Order Date: June 01, 2026 (approval date)

Case Overview

I3E Trust (the Fund) and CIIE Initiatives (the Investment Manager) filed suo-motu settlement applications (Nos. 8749/2025 and 8750/2025 respectively) with SEBI under the Securities and Exchange Board of India (Settlement Proceedings) Regulations. The applications sought to settle potential enforcement proceedings for violations of regulation 23(1)(a) read with regulations 23(3) and 24(2) of the SEBI (Venture Capital Funds) Regulations, 1996.

The violation stemmed from I3E Trust's scheme 'Infuse Capital', which was launched with an initial tenure of eight years commencing May 21, 2013, and included a provision for a two-year extension. The extended tenure ended on May 21, 2023. However, the process of liquidating assets and distributing proceeds to investors was completed only on March 31, 2025, resulting in a delay of approximately two years beyond the scheme's termination date. This delay constituted non-compliance with the VCF Regulations regarding timely winding up.

The settlement process involved deliberation with SEBI's Internal Committee on March 11, 2026, where terms were discussed. The Committee recommended a settlement amount of ₹10,87,500 (Rupees Ten Lakh Eighty-Seven Thousand Five Hundred Only), payable jointly and severally by the applicants. The applicants accepted these terms via letter dated March 16, 2026. The High Powered Advisory Committee (HPAC) recommended settlement on these terms on May 06, 2026, which was subsequently approved by the Panel of Whole Time Members on June 01, 2026. The applicants remitted the settlement amount, confirmed by SEBI on June 11, 2026.

Final Outcome

SEBI ordered the settlement of any potential enforcement proceedings for the specified violations. The order stipulates that SEBI will not initiate any enforcement action against I3E Trust and CIIE Initiatives for these violations. However, the order is without prejudice to SEBI's right to initiate appropriate action under regulations 28 and 31 of the Settlement Regulations if any representations made by the applicants are subsequently found to be untrue, if they breach any undertakings/waivers filed, or if they fail to pay any additional amount due to discrepancies in the settlement terms. The order came into force immediately.

Topics: SEBI Settlement, Venture Capital Regulations, Compliance Violation