Embassy REIT chief Aravind Maiya.
Credit: LinkedIn/Aravind Maiya
Embassy Office Parks, 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 Securities and Exchange Board of India's (SEBI) said he was not fit to hold the position.
In an interim order available on the 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.