Description
SEBI imposes penalty on Kreo Capital Private Limited (Merchant Banker Registration No. INM000012689) for violations of Merchant Bankers Regulations during the inspection period April 2022 to April 2024.
Summary
SEBI issued an adjudication order against Kreo Capital Private Limited (PAN: AAQCA7346A), a SEBI-registered merchant banker (Registration No. INM000012689), following an inspection conducted on June 13, 2024. The inspection covered the period from April 01, 2022 to April 30, 2024 and identified violations of SEBI (Merchant Bankers) Regulations, 1992, Master Circular dated September 26, 2023, and other applicable circulars. The adjudication proceedings were initiated under Section 15-I of the SEBI Act, 1992.
Key Points
- Inspection of Kreo Capital Private Limited conducted on June 13, 2024
- Inspection period: April 01, 2022 to April 30, 2024
- Entity: SEBI-registered merchant banker (Registration No. INM000012689)
- Post-inspection analysis identified multiple non-compliances
- Show Cause Notice issued on October 15, 2024
- Adjudicating Officer appointed under Section 15-I of SEBI Act
Regulatory Violations
The following violations were alleged:
Regulation 28(2) read with clause 20 of Schedule III of Merchant Bankers Regulations - Violation of provisions under para 1.1, para 1.2 of Chapter 1, and para 7.1 of Chapter II read with Annexure III of SEBI Master Circular dated September 26, 2023 (erstwhile Circular No. MIRSD/DPS-2/MB/Cir-16/2008 dated May 06, 2008)
Regulation 9A(1)(f) of Merchant Bankers Regulations - Non-compliance with para 1.1 and para 1.2 of Chapter 1 of Master Circular dated September 26, 2023
Regulation 13A of Merchant Bankers Regulations - Violation read with SEBI Circular No. 1 dated June 05, 1998
Compliance Requirements
Merchant bankers registered with SEBI must:
- Comply with all provisions of SEBI (Merchant Bankers) Regulations, 1992
- Adhere to requirements specified in Master Circular dated September 26, 2023
- Maintain compliance with Schedule III obligations
- Follow reporting and operational guidelines as per applicable circulars
- Respond to inspection observations and show cause notices within stipulated timelines
Important Dates
- Inspection Date: June 13, 2024
- Inspection Observations Shared: July 16, 2024
- Noticee Comments Submitted: July 22, 2024 and August 03, 2024
- First AO Appointed: October 04, 2024
- Show Cause Notice Issued: October 15, 2024
- Second AO Appointed: January 24, 2025
- Current AO Appointed: April 21, 2025
Impact Assessment
This adjudication order has limited market-wide impact as it is specific to compliance violations by a single merchant banker. The order demonstrates SEBI’s ongoing supervision of registered intermediaries and enforcement of regulatory standards. Market participants working with Kreo Capital Private Limited should verify the entity’s compliance status. The matter serves as a reminder to all merchant bankers to maintain strict adherence to regulatory requirements, Master Circulars, and operational guidelines. The outcome of the adjudication proceedings and any penalties imposed will be determined based on the inquiry and submissions made by the Noticee.
Impact Justification
Entity-specific adjudication order against a merchant banker for regulatory non-compliance. Limited market-wide impact as it pertains to internal compliance violations by a single intermediary.