The Securities and Exchange Board of India (Sebi) has cleared Karvy Capital Ltd and its executives of allegations related to alternative investment fund (AIF) regulations. This decision followed an inquiry into the compliance of Karvy group AIFs, including Karvy Capital Alternative Investment Trust and KCAP Alternative Investment Fund. Sebi had previously issued a show cause notice to certain officials over suspected violations. However, the investigation found that mitigating factors, such as legal obstacles preventing the divestment of stakes, indicated that the accused did not willfully breach market rules. Consequently, no financial penalties were imposed, and the charges were dismissed.