Embassy REIT CEO Aravind Maiya resigns following Sebi suspension directive

Aravind Maiya has resigned as CEO of Embassy REIT effective immediately, following Sebi's directive for his suspension due to a debarment for professional misconduct by NFRA

Embassy Office Parks, the largest real estate investment trust (REIT) in India, announced on Tuesday that Aravind Maiya has resigned as the CEO of Embassy REIT, effective immediately.

 

Maiya’s departure follows a directive from the Securities and Exchange Board of India (Sebi), which ordered the management of Embassy REIT to suspend him in an interim capacity. Sebi has also mandated that an interim CEO be appointed without delay.

 

This regulatory action stems from the National Financial Reporting Authority (NFRA) imposing a ten-year debarment on Maiya and levying a fine of Rs 50 lakh for ‘professional misconduct’ related to the audit of Coffee Day Enterprises, which is alleged to have concealed a significant fraud. The NFRA issued its ruling on August 19.

 

Background of Embassy REIT

Launched in 2019, Embassy REIT manages nearly Rs 40,000 crore of unit holders’ investments. Maiya took on the role of chief executive of the REIT’s management in July 2023.

 

Sebi highlighted that the management of Embassy REIT had not taken any corrective measures to align with the “fit and proper criteria” regarding Maiya’s conduct and exhibited “strong reluctance” to do so.

 

According to the regulator, the management was obligated to replace the CEO within 30 days following Maiya’s disqualification. Sebi member Ashwani Bhatia emphasised in the interim order that the regulator is entitled to ensure that Maiya serves his debarment due to professional misconduct, rather than assuming unrelated leadership roles that demand high standards of competence and integrity in the financial sector.

 

The NFRA’s order identified severe negligence and failure to exercise due diligence during the Coffee Day audit, including the non-disclosure of significant misstatements known to Maiya. Previous findings from Sebi noted that Rs 3,535 crore had been transferred from Coffee Day’s accounts to its subsidiaries and related parties without the necessary approvals.

 

The Sebi stepped in to address REIT concerns, as scrutiny intensified from the Congress party and US-based short-seller Hindenburg Research. The two have questioned the regulatory oversight of India’s REIT sector, raising broader issues about the integrity of the country’s financial framework. In a pointed statement, Sebi emphasised that any entity blacklisted by the National Financial Reporting Authority must remain accountable, warning that failure to enforce this could compromise the credibility of India’s regulatory system.

 

(With agency inputs)