Description

SEBI settlement order against Embassy Office Parks Management Services for failure to timely disclose NFRA order against CEO Aravind Maiya and subsequent fit and proper person assessment to unitholders and stock exchanges.

Summary

SEBI issued Settlement Order No. SO/JS/DP/2025-26/8595 against Embassy Office Parks Management Services Private Limited (Manager to Embassy Office Parks REIT) for failure to make timely disclosures to unitholders and stock exchanges. The violations related to not disclosing: (1) NFRA order dated August 19, 2024 finding CEO Aravind Maiya guilty of professional misconduct in his previous role as auditor (disclosed 53 days late on October 11, 2024); (2) legal opinions on fit and proper status (disclosed 35 days late on October 19, 2024); and (3) SEBI’s October 08, 2024 letter stating Mr. Maiya is no longer fit and proper to act as CEO (disclosed 11 days late on October 19, 2024).

Key Points

  • Embassy Office Parks Management Services Private Limited (PAN: AADCE6193J) is the applicant in Settlement Application No. 8595/2025
  • Mr. Aravind Maiya was CEO and key managerial personnel of the Manager as on the date of NFRA order
  • NFRA found Mr. Maiya guilty of professional misconduct in his previous role as auditor on August 19, 2024
  • NFRA order was disclosed to stock exchanges 53 days late (on October 11, 2024)
  • Legal opinions on fit and proper status were disclosed 35 days late (on October 19, 2024)
  • SEBI’s letter dated October 08, 2024 stating Mr. Maiya is no longer fit and proper was disclosed 11 days late (on October 19, 2024)
  • Alleged violations: Regulation 7(d) read with Clause 1, 2, 7 and 8 of Schedule VI and Regulation 10(14) of SEBI (Real Estate Investment Trusts) Regulations, 2014
  • Adjudicating Officer appointed on April 02, 2025 under Section 15-I of SEBI Act

Regulatory Changes

No new regulatory changes introduced. This order enforces existing disclosure requirements under SEBI (Real Estate Investment Trusts) Regulations, 2014, emphasizing that material events involving key managerial personnel, particularly fit and proper person assessments, must be disclosed promptly to unitholders and stock exchanges.

Compliance Requirements

  • REIT managers must disclose material events involving key managerial personnel to stock exchanges and unitholders in a timely manner
  • Orders by regulatory authorities (such as NFRA) against key personnel constitute material events requiring disclosure
  • Internal assessments and legal opinions regarding fit and proper status of key personnel must be disclosed
  • Communications from SEBI regarding fit and proper person criteria must be disclosed promptly
  • Compliance with Regulation 7(d), Schedule VI (Clauses 1, 2, 7, 8), and Regulation 10(14) of REIT Regulations is mandatory

Important Dates

  • August 19, 2024: NFRA order issued against Aravind Maiya
  • August 21 and 25, 2024: Applicant submitted emails to SEBI stating view that fit and proper criteria would not trigger
  • September 13, 2024: Legal opinions forwarded to SEBI
  • October 08, 2024: SEBI communicated that Mr. Maiya is no longer fit and proper
  • October 11, 2024: NFRA order disclosed to stock exchanges (53 days late)
  • October 19, 2024: Legal opinions and SEBI letter disclosed to stock exchanges (35 days and 11 days late respectively)
  • April 02, 2025: Adjudicating Officer appointed

Impact Assessment

Governance Impact: Reinforces importance of timely disclosure of material events affecting key managerial personnel of REIT managers, particularly regarding fit and proper person criteria.

REIT Sector Impact: Sets precedent for disclosure standards when regulatory actions affect key personnel. REIT managers must promptly disclose any regulatory findings against key personnel, internal assessments, and SEBI communications.

Investor Protection: Emphasizes unitholders’ right to timely information about key personnel’s regulatory standing, enabling informed investment decisions.

Operational Impact: REIT managers must establish robust systems for monitoring regulatory actions against key personnel and ensuring prompt disclosure to avoid violations and settlement proceedings.

Impact Justification

Settlement order for disclosure violations by REIT manager regarding CEO's fit and proper status. Important for REIT governance but limited to specific entity.