Modulus Alternatives Settles Sebi Case for Rs 10.87 Lakh

Modulus Alternatives Investment Managers, a private credit platform, recently paid Rs 10.87 lakh to settle a case with the capital markets regulator, Sebi. This settlement addresses alleged violations of Alternative Investment Funds (AIF) norms, specifically regarding investment manager obligations.

The core issue revolved around the investment manager’s requirement to maintain its continuing interest in the fund on a pro-rata basis alongside other investors. Sebi found that this crucial regulatory obligation was not adequately met by Modulus Alternatives.

Examining the AIF Norms Breach

Sebi’s examination meticulously reviewed quarterly activity reports for India Credit Opportunities Fund II, which is a Category II AIF managed by Modulus Alternatives. This detailed review uncovered the operational discrepancy at the heart of the violation.

• The drawdowns made by the investment manager were not proportionate.
• This disproportionate action led to a direct breach of the established AIF regulations.

Key Settlement Figures

• Settlement Amount: Rs 10.87 lakh
• Settlement Confirmation Date: May 25, 2026

Modulus Alternatives initiated the resolution process by filing a suo motu settlement application with the market regulator. After careful deliberations, the agreed settlement amount was officially confirmed on the specified date.

Sebi has explicitly stated that it will not initiate further enforcement action for these alleged violations. However, the regulator firmly reserves its right to take additional measures if any misrepresentation is discovered or if the terms of the settlement are breached in the future.