Authority: Securities and Exchange Board of India (SEBI)
Order Date: September 23, 2026
Case Overview
Kaizen Trust filed a suo-motu settlement application (No. 8794/2026) with SEBI under the SEBI (Settlement Proceedings) Regulations, 2018. The application sought to settle potential enforcement proceedings for violations of regulation 23(1)(a) read with regulation 24(2) of the SEBI (Venture Capital Funds) Regulations, 1996 (VCF Regulations). The case concerned the trust's Kaizen Domestic Scheme I, which was launched on June 06, 2012, with an initial tenure of eight years and a provision for a two-year extension. The extended tenure ended on June 05, 2022. As per regulations, the fund was required to initiate winding up by this date and complete the liquidation of assets and distribution of proceeds to investors within three months, i.e., by September 05, 2022. However, the fund completed this process only on March 13, 2025, resulting in a delay of approximately 2 years and 6 months, constituting non-compliance with the VCF Regulations.
Final Outcome
SEBI's Internal Committee (IC) met with the applicant's representatives on April 07, 2026, and recommended a settlement amount of ₹10,87,500 (Rupees Ten lakhs eighty-seven thousand five hundred only), computed per Schedule II of the Settlement Regulations. The applicant accepted these terms via email on April 17, 2026. The High Powered Advisory Committee (HPAC) recommended settlement on these terms in its meeting on June 29, 2026, which was approved by the Panel of Whole Time Members on August 12, 2026. The applicant paid the full settlement amount on August 21, 2026. Consequently, SEBI has settled the proceedings, barring any enforcement action for the specific violations, subject to conditions that SEBI may act if any representations are found untrue, terms are breached, or a payment discrepancy exists. The order is effective immediately and was published on SEBI's website.
Topics: SEBI Settlement, Venture Capital Fund, Regulatory Compliance