MAURITIAN PE FUNDS UNDER SEBI SCANNER

The Securities and Exchange Board of India (SEBI) has sounded an alarm over Mauritius-based Private Equity (PE) funds picking up controlling stakes in listed Indian companies through the secondary market. This could lead to asset stripping, as the identities of many of these foreign investors are not disclosed. SEBI has found that many foreign companies involved in such takeovers are only fronts based in Mauritius and have a very low capital base. The funds for these takeovers flow in from Overseas PE funds and the ultimate source of funds is not verifiable.