India's Embassy REIT chief steps down following market regulator's order (updated)
05/11/2024 02:55
(Adds details throughout)
Nov 5 (Reuters) - Embassy Office Parks EMBA.NS ,
India's largest real estate investment trust (REIT), said on
Tuesday that Aravind Maiya will be stepping down as CEO of
Embassy REIT, effective immediately, after the country's markets
regulator said he was not fit to hold the position.
In an interim order available on the Securities and Exchange
Board of India's (SEBI) website, the regulator directed Embassy
Office Parks Management Services, the manager of Embassy REIT to
suspend Aravind Maiya from acting as CEO since he did not meet
the ‘fit and proper’ criteria for the position. The regulator
also told Embassy to appoint an interim CEO with immediate
effect.
The ‘fit and proper’ criteria, used across institutions
which have a fiduciary responsibility to investors, includes
checks on an individual’s track record, professional history and
any past regulatory orders against them.
SEBI’s action followed an order by the National Financial
Reporting Authority (NFRA) in August, which had examined the
statutory auditors of Coffee Day Enterprises on their role in
alleged financial irregularities at the company in 2018-19.
Maiya was then the engagement partner at the statutory
auditor for Coffee Day Enterprises.
The NFRA, a quasi regulator which looks into the conduct of
auditors, said it found serious lapses on the part of the
auditor, Maiya and others.
While Maiya has challenged the order, SEBI found he did not
in the interim meet the fit and proper criteria for institutions
such as REITs.
The (NFRA) Order leads to "a reasonable inference that Mr.
Aravind Maiya failed to act in public interest. Instead, he
acted in a manner which harmed ordinary investors," SEBI said in
its order.
The order further noted that despite a number of emails,
meetings and specific instructions, the manager of Embassy REIT
had tried to retain Maiya.
Embassy REIT is India’s first publicly listed REIT and owns
and operates a 51.1 million square feet portfolio.
(Reporting by Ira Dugal and Ashish Chandra; Editing by Sherry
Jacob-Phillips and Varun H K)
((mailto:ashish.chandra@thomsonreuters.com; +91 7982114624;))