HDFC AMC and HDFC Trustee Company Tuesday settled a case with securities market regulator Sebi related to alleged violation of mutual fund norms after paying Rs 3.78 crore towards settlement fee. The Securities and Exchange Board of India (Sebi) agreed to settle proposed adjudication proceedings in the case after it was approached by the two entities with a plea under the settlement regulations. Under the settlement norms, an entity is allowed to settle charges by paying a penalty without admission or denial of guilt. "The pending adjudication proceedings initiated against noticee. is disposed of," Sebi said in settlement orders. The regulator had initiated adjudication proceedings against HDFC Asset Management Company and HDFC Trustee Company in April for alleged violations of several provisions of mutual fund regulations. Both firms submitted separate applications with Sebi to settle the case on payment of settlement charges. Thereafter, the Sebi's advisory committee recommended the case for settlement upon the payment of Rs 3.78 crore. This was also approved by the regulator's panel of whole-time members, following which they remitted the amount. Accordingly, the regulator has disposed of the adjudication proceedings initiated against the both entities. Earlier in July, the regulator had directed HDFC AMC, the country's second largest mutual fund house, to cancel the shares allotted to distributors and advisers ahead of its initial public offering, officials had said. Sebi had also asked the fund house to return the money it had collected from distributors and independent financial advisers along with an interest rate of 12 per cent, they had added. HDFC AMC had made a private placement of shares to the tune of Rs 150 crore to 140 distributors in April this year. The shares were offered at Rs 1,050 per unit. Though it had offered stocks to nearly 200 distributors, only 140 subscribed, industry insiders had said. The move by HDFC AMC was seen as a "conflict of interest" by fund houses, they had added. Last month, ICICI Prudential AMC and its chief Nimesh Shah settled a Sebi probe into alleged violation of mutual fund norms over their investments in IPO of the fund house's group firm ICICI Securities. The fund house had paid Rs 89.96 lakh, while Shah remitted Rs 6.8 lakh towards settlement fees.