WL Ross settles with SEBI over SpiceJet case
WL Ross has paid INR11 million ($177,000) in a settlement with the Securities and Exchange Board of India (SEBI), ending a long-running case over its investment in low-cost Indian airline SpiceJet.
The restructuring and turnaround firm had acquired a 30% stake in the carrier in August 2008 for $80 million before exiting two years later to Sun Group, which now holds a 52.14% stake in the business, for $127 million. WL Ross generated a 58% IRR.
According to a consent order passed yesterday, the financial markets regulator had been probing suspected violations by WL Ross entities with regard to takeover norms. These included failure to make a public announcement to acquire shares of Spicejet and suppression of information from the regulator and the public at large.
SEBI had initiated adjudication proceedings against the entities - WLR Recovery III (India), WLR Recovery IV/ESC (India), India Asset Recovery Fund and WLR/GS (India) - over the alleged violations in 2011
The four entities filed a plea for a INR11 million settlement with the regulator under its consent order mechanism in 2012, which was approved by SEBI's High Powered Advisory Committee (HPAC) earlier this year.
SEBI said it would be is disposing of the adjudication proceedings initiated against the entities with immediate effect. It added that enforcement actions, including commencing or reopening of the proceedings, could be initiated if any representation made by the WL R entities is found to be false.
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