Embassy Office Parks Management Services is manager to Embassy REIT, the country’s largest real estate investment trust with a market capitalisation of ₹40,000 crore. The regulator has asked the company to appoint an interim CEO.
Sebi’s action follows an order passed by the National Financial Reporting Authority (NFRA) on August 19,2024, debarring Maiya for 10 years for professional misconduct while auditing Coffee Day Enterprises.
NFRA in its order alleged that Maiya demonstrated serious lapses and absence of due diligence by failing to obtain sufficient audit evidence for audit opinion and gross negligence in verifying the business rationale of unusually high amount of ₹2,226 crore of loans given to Mysore Amalgamated Coffee Estates, a related part of Coffee Day Enterprises.
“It is evident that Aravind Maiya’s serious professional misconduct during the audit of a listed public company, as held by the NFRA, displays a complete failure to act in public interest. Therefore, he cannot be reasonably considered competent to supervise Embassy REIT as CEO of its Manager, which requires prudent discharge of fiduciary duties, protection of unitholders’ interest, compliance with valuation and audit requirements and disclosure of material facts. The risk arising out of the NFRA order needs to be mitigated and not remain
in the system, to instil confidence in the ecosystem,” Sebi whole-time member Ashwani Bhatia said in his order on Monday.The regulator said despite more than one month since the NFRA order becoming effective on Maiya and its instruction to Embassy REIT on Maiya being ineligible, it has retained him as the CEO. “It cannot be the case that an entity declared persona non grata by NFRA is able to claim diplomatic immunity from Sebi. Doing so would erode credibility of regulation,” Sebi said.
The company did not respond to ET’s query.
