In an unusual directive, SEBI asked Embassy Office Parks Management Services, the manager of Embassy REIT, to suspend the CEO Aravind Maiya through an interim order.
The regulator also told the Embassy to immediately appoint an interim CEO.
- The directive came in the wake of concerns about Maiya’s professional background following an investigation by the National Financial Reporting Authority (NFRA) related to his role as an auditor in Coffee Day Enterprises.
- The “fit and proper” criteria set by SEBI is designed to ensure that leaders of investment firms have a clear professional record and no prior involvement in financial irregularities.
- SEBI’s action follows NFRA’s findings in August, which highlighted potential lapses by the statutory auditors (including Maiya) of Coffee Day Enterprises. Maiya served as an engagement partner during a period of alleged financial mismanagement at the company in 2018-19.
- The NFRA concluded that there were “serious lapses” by the auditors.
- Though Maiya has appealed the NFRA order, SEBI’s interim decision was based on the findings, which it stated “reasonably infer that Mr. Aravind Maiya failed to act in public interest, instead acting in a manner which harmed ordinary investors.”
- The regulator also criticised Embassy REIT management, noting that despite “numerous emails, meetings, and specific instructions,” the company had attempted to retain Maiya as the CEO.
In Compliance with the directive, Embassy suspended Maiya wef from November 5, 2024. He however, has been currently retained as Head of Strategy for the business.