Embassy REIT Chief Aravind Maiya steps down after SEBI directive; regulator orders immediate appointment of interim CEO

Embassy Office Parks, India's largest real estate investment trust (REIT), announced on Tuesday that Aravind Maiya will step down as CEO of Embassy REIT, effective immediately.

The decision comes shortly after Indian markets regulator SEBI directed Embassy Office Parks Management Services, the manager of Embassy REIT, to suspend Maiya in an interim order. The regulator also told the Embassy on Monday to immediately appoint an interim CEO.

In an interim order available on SEBI’s website, the regulator instructed Embassy Office Parks Management Services, the manager of Embassy REIT, to suspend Maiya from the CEO position immediately. The directive comes 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 a past financial misconduct case.

‘fit and proper’ criteria

The “fit and proper” criteria set by SEBI is a regulatory standard designed to ensure that leaders of investment firms have a clear professional record andno prior involvement in financial irregularities. SEBI’s action follows NFRA’s findings in August, which highlighted potential lapses by the statutory auditors of Coffee Day Enterprises, including Maiya, who served as an engagement partner during a period of alleged financial mismanagement at the company in 2018-19.

The NFRA, a regulatory body overseeing auditor conduct, concluded that there were “serious lapses” by Maiya and others involved. 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 criticized Embassy REIT management, noting that despite “numerous emails, meetings, and specific instructions,” the company had attempted to retain Maiya as CEO. SEBI’s directive mandates that Embassy REIT appoint an interim CEO to assume leadership responsibilities immediately.

Embassy REIT, which operates a 51.1 million square foot portfolio across India, is the country’s first publicly traded REIT.

(With inputs from Reuters)