NFRA imposes 10-year audit ban and ₹50 lakh penalty on Aravind Maiya

This order addresses SEBI's examination of whether Axis Trustee Services Ltd. fulfilled its duties as the trustee of Embassy Office Parks REIT to oversee the manager's compliance with 'fit and proper' criteria following an NFRA order against the manager's CEO, Aravind Maiya.

Who it concerns: Axis Trustee Services Ltd. (Noticee), Embassy Office Parks Management Services Private Limited (Manager), Aravind Maiya (CEO of Manager), Embassy Office Parks REIT

What SEBI found or ordered

• SEBI alleged Axis Trustee Services Ltd. violated regulations 9(3), 9(4), and 9(16) of the REIT Regulations and regulation 7(d) read with Schedule VI.
• The core issue was the failure to ensure timely disclosure to unitholders regarding the NFRA order dated August 19, 2024, which debarred Aravind Maiya for 10 years and imposed a penalty of Rs 50 lakh on him.
• SEBI alleged the trustee failed to independently assess the 'fit and proper' status of the CEO and did not take corrective actions until SEBI intervened.
• The document provided is truncated and does not contain the final adjudication decision, penalty amount, or final directions imposed by the Adjudicating Officer.

Also in the document

• The NFRA order against Aravind Maiya included a 10-year debarment from acting as an auditor and a monetary penalty of Rs 50 lakh.
• SEBI noted that the trustee held meetings with independent directors only in October 2024, approximately two months after the NFRA order was issued in August 2024.
• The manager (EOPMSPL) obtained legal opinions arguing that 'fit and proper' criteria did not apply to the CEO, a position SEBI alleged was not adequately disclosed to unitholders until October 19, 2024.