14 January 2026
A settled SEBI case turns on one arithmetic question: may a realised gain be added back to an AIF's corpus?
What was the Abans AIF concentration norm settlement about?
SEBI alleged that a scheme added an ₹8.24 crore gain from liquidated investments back to its ₹65.99 crore corpus, treated investible funds as ₹74.23 crore, and calculated the 25% concentration limit under regulation 15(1)(c) on that larger figure. SEBI's position is that corpus covers only funds committed by investors. The applicants settled for ₹8,70,000 without admitting or denying the findings.
What happened
SEBI passed a settlement order on 14 January 2026, reference SO//EFD2/2025-26/8523-24, signed by whole time members Kamlesh Chandra Varshney and Amarjeet Singh. The applicants were Abans Alternative Fund Managers LLP (the manager) and Abans Investment Trust (the fund), in respect of the scheme Abans AIF-1.
They filed a suo-motu settlement application under the SEBI (Settlement Proceedings) Regulations, 2018, proposing to settle "by neither admitting nor denying the findings of facts and conclusions of law", the proceedings that might be initiated for an alleged violation of regulation 15(1)(c) of the AIF Regulations.
The arithmetic at the centre of it
The data came from filings under regulation 28. As the order sets it out:
| Step | Amount |
|---|---|
| Initial corpus raised | ₹65.99 crore |
| Cost of investments later liquidated | ₹29.7 crore |
| Proceeds of that liquidation | ₹37.94 crore |
| Gain on the transaction | ₹8.24 crore |
| Investible funds, as the scheme treated them | ₹74.23 crore |
| 25% concentration limit, as calculated | ₹18.55 crore |
SEBI's objection is to the fourth and fifth lines. Under regulations 2(1)(p) and 2(1)(h), corpus is the total amount committed by investors and "precludes inclusion of any gains/losses made from the liquidation of previous investments held under the Schemes of AIFs." Adding the gain back inflated investible funds, which inflated the limit derived from them, which — SEBI alleged — led the manager to invest in excess of the permitted concentration.
How it was settled
The applicants' representatives met SEBI's Internal Committee on 29 July 2025 and filed revised settlement terms on 6 August 2025 proposing ₹8,70,000. The High Powered Advisory Committee recommended acceptance on 15 September 2025; the Panel of Whole Time Members approved on 14 October 2025; a Notice of Demand issued on 26 November 2025; the applicants remitted on 11 December 2025 and SEBI confirmed credit.
Under section 15JB of the SEBI Act read with regulation 23 of the Settlement Regulations, the proceedings are settled. SEBI will not initiate enforcement action for those violations, without prejudice to its rights under regulation 28 if a representation proves untrue, an undertaking is breached, or a discrepancy in the settlement terms emerges.
Why it matters beyond this fund
The percentage was never in dispute. The denominator was.
Concentration limits, continuing-interest ratios and several other AIF obligations are all expressed as proportions of corpus or investible funds, so the definition of the base does more work than the ratio does. This order is a plain statement of where SEBI draws that line: committed capital counts, realised gains on the way do not, and a fund that recycles a gain into its own headroom has enlarged a limit rather than earned one.
What is not settled
Whether the violation occurred. The applicants neither admitted nor denied, and the order adjudicates nothing.
Sources
- Settlement Order in respect of Examination of violation of concentration norms by AIF and Investment Manager — SO//EFD2/2025-26/8523-24 — SEBI, 14 January 2026 · primary
- Settlement Order, full text, 3 pages — SEBI, 14 January 2026 · primary
Dated 14 January 2026, last checked against source 25 August 2026. The dateline is the date of the instrument this item reports, not the date the page was written. This page reports what a document says. It is information, not legal, tax or investment advice, and it is not a recommendation about any fund.