The Securities and Exchange Board of India (SEBI) has issued an interim order directing the suspension of Aravind Maiya, from acting as CEO of Embassy Office Parks Management Services, the manager of Embassy Office Parks REIT, in connection with the audit of a case of monetary diversion by Coffee Day Enterprises.
The regulator also ordered the appointment of an interim CEO with immediate effect. Maiya became CEO of Embassy REIT in July 2023.
The investigation and interim directions from SEBI follow an earlier order by the National Financial Reporting Authority (NFRA) against Maiya and the accounting firm he was associated with at the time.
In August, the NFRA had barred Maiya, a former partner at BSR & Co who had conducted CDE’s audit, from practicing for 10 years and also imposed a fine of ₹50 lakh on him. The company and its partners were found guilty of concealing the fraud at CDE and of misconduct.
SEBI said it has examined the compliance status of Embassy Office Parks REIT and assessed Maiya’s eligibility to be CEO of the REIT, and on October 4, communicated to concerned parties that he did not comply with the ‘fit and proper person’ criteria for action. as CEO.
No relationship
Embassy REIT management argued that the NFRA order had no relation to the REIT, its portfolio, its manager or their auditors. It pointed out that Maiya had left BSR & Co in May 2019 and has not worked as a chartered accountant or auditor since then. They also said that taking action against Maiya would be detrimental to the interests of the REIT and its shareholders.
While passing the order, Ashwani Bhatia, a full-time member of SEBI, submitted that the CEO of a manager of a REIT played a key role in its operations and it should not be managed by someone who was under the cloud of a operating NFRA order.
It was clear that “Maiya’s serious professional misconduct during the audit of a listed company, as held by the NFRA, demonstrates a complete inability to act in the public interest. Therefore, he cannot reasonably be considered competent to supervise Embassy REIT as its manager as CEO…,” he said. He added that allowing Maiya to remain at the helm of the REIT’s affairs could harm investors, exposing them to risk.
Embassy Office Parks Management Services has been instructed to meet the ‘fit and proper person’ criteria and also show reasons why appropriate action should not be taken against it.
