New Delhi, Nov. 18 -- Embassy Office Parks Management Services Pvt Ltd, the manager of Embassy Office Parks REIT, has settled allegations that it violated regulations governing real estate investment trusts.
The company allegedly did not inform the REIT's unitholders in a timely manner about regulatory orders and observations passed against its CEO Aravind Maiya. It paid Rs 18.39 lakh to settle the allegations.
In a settlement order issued on Tuesday, the Securities and Exchange Board of India (SEBI) said that a showcause notice had been issued to the REIT's manager in May 2025.
The notice alleged that Embassy REIT's manager had violated the regulations by not making timely disclosures of the observations made by the National Financial Reporting Authority (NFRA) and by SEBI on Maiya.
According to SEBI's examination report, which listed the allegations, Maiya was found guilty of professional misconduct in his previous role as an auditor by NFRA. The auditing and accounting supervisory body had found that statutory auditors of Coffee Day Enterprises in FY19 had failed in their duty to report fraud, and had debarred Maiya from practice for 10 years.
The regulator's report observed that the NFRA order-being a material event-should have been disclosed to the unitholders and stock exchanges, but the disclosure was made 53 days after the order was issued.
To this, the REIT manager had responded by submitting that the order was not disclosed to the unitholders since it was of the view that "the fit and proper person criteria would not trigger in respect of the CEO of the Manager of REIT, i.e., it would not be applicable to Mr. Aravind Maiya" and that it had sought legal advice even from a retired Supreme Court judge.
As SEBI's examination report noted, the REIT manager's opinion that Maiya was "fit and proper" to act as its CEO was not disclosed to the stock exchanges, and the disclosure was made on October 19, 2024, after 35 days.
The report also noted that SEBI had communicated its own assessment of the matter on October 8, 2024, informing the REIT manager that Maiya was no longer a "fit and proper person" to hold his position as per SEBI (Intermediaries) Regulations, and noted that the REIT manager had not disclosed this assessment to its unitholders in a timely manner but after 11 days from receiving the communication.
Maiya stepped down as CEO of the REIT last November, after the market regulator had issued an interim order saying that he did not meet the "fit and proper" criteria required for the position.
Published by HT Digital Content Services with permission from VC Circle.