Brookprop Management Services settles case with SEBI in Brookfield REIT matter

Brookprop Management Services settles case with SEBI in Brookfield REIT inspection matter

Brookprop Management Services Private Limited, the manager of Brookfield India Real Estate Investment Trust (REIT) has settled case with Securities and Exchange Board of India (Sebi), over alleged violations linked to the use of borrowed funds for distributions.

The case originated from a thematic inspection of REITs, where Sebi observed that the applicant had allegedly facilitated distribution of Net Distributable Cash Flow (NDCF) using borrowed funds, a practice not permitted under the REIT Regulations. The market regulator had alleged contravention of Regulation 7(d) of the Sebi (REIT) Regulations, 2014. Settlement order noted, “Applicant for alleged violation of the aforesaid provisions. Briefly stated, it was, inter alia, observed and alleged in respect of the Applicant that it had made use of borrowed funds for facilitating distribution of Net Distributable Cash Flow”.

Following the observations, a show-cause notice was issued, initiating adjudication proceedings. While proceedings were pending, Brookprop Management Services filed a settlement application on July 26, 2024, under the Sebi settlement proceedings, proposing to resolve the matter without admitting or denying the findings. After discussions with Sebi’s Internal Committee in October 2024, the applicant submitted revised terms in November.

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Sebi’s High-Powered Advisory Committee (HPAC), in its meeting on June 5, 2025, recommended that the case be settled upon payment of Rs 20.47 lakh. The Panel of Whole-Time Members of Sebi accepted the recommendation on August 18, 2025, and the same was communicated to the applicant on August 21.

Subsequently, on September 1, 2025, the applicant confirmed the remittance of the settlement amount, which Sebi acknowledged.

Settlement proceedings under Sebi regulations provide entities an opportunity to resolve alleged violations through monetary or other terms, avoiding prolonged litigation while ensuring regulatory compliance.

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