Markets regulator Securities and Exchange Board of India (Sebi) on Monday directed Embassy Office Parks to suspend its chief executive officer Aravind Maiya and appoint an interim CEO with immediate effect.
Sebi direction follows a National Financial Reporting Authority (NFRA) order that barred Maiya for 10 years from undertaking any audit of financial statements or internal audit of the functions and activities of any company.
The NFRA had also imposed a penalty of ₹50 lakh on Maiya.
“The noticee (Embassy Office Parks) is directed to suspend Aravind Maiya from acting as its CEO and appoint an interim CEO with immediate effect, in compliance with applicable laws including ‘fit and proper person’ criteria, till further directions, or till the NFRA Order dated August 19, 2024 is stayed/set aside, whichever is earlier,” Sebi said in a statement.
The Sebi direction came after it started examination of the status of compliance of Embassy Office Parks REIT and its manager Embassy Office Parks Management Services Pvt Ltd (EOPMSPL) with the “fit and proper person” criteria under intermediaries regulations.
The NFRA order pertains to lapses in the audit of Coffee Day Enterprises for the 2018-19 financial year.
EOPMSPL is the manager of Embassy Office Parks REIT, which was sponsored by Bengaluru-based realty firm Embassy Group and global investment firm Blackstone.
Sebi directed Embassy Office Parks Services to ensure compliance with ‘fit and proper person’ criteria and also issued a show cause notice to the company, seeking its response on why an enquiry should not be initiated against it and penalty not be imposed on the firm.
EOPMSPL has been given 21 days to file its reply/objections.
“I note that NFRA order dated August 19, 2024, was effective after 30 days from the issuance of the order and as per the submissions of the noticee (EOPMSPL) an appeal has been filed by Aravind Maiya against the NFRA order. However, it is also pertinent to note that the appeal is pending, and no stay has been granted,” Sebi’s whole-time member Ashwani Bhatia said.
