New Delhi, Capital markets regulator Sebi has levied a fine of Rs 10 lakh on Axis Trustee Services Ltd for disclosure and governance lapses linked to Embassy Office Parks REIT.
Embassy REIT is India’s first publicly listed Real Estate Investment Trust (REIT).
The case relates to an August 19, 2024, order by the National Financial Reporting Authority (NFRA), which found Aravind Maiya, then CEO of Embassy Office Parks Management Services Pvt Ltd, guilty of professional misconduct, imposing a Rs 50 lakh penalty and a ten-year debarment from audit functions.
In an order passed on April 29, Sebi said the Axis Trustee Services was informed of the NFRA order on August 20, 2024, but the disclosure to unitholders was made only after a delay of 53 days.
The regulator observed that the information was material as it impacted the competence and integrity of the CEO and required prompt disclosure.
Sebi noted that while the primary responsibility of disclosures lies with the manager, the trustee has a parallel and proactive duty to ensure compliance and address delays urgently.
Further, the regulator observed that the trustee failed to independently assess whether Maiya met the ‘fit and proper person’ criteria despite a direction by Sebi on August 20, 2024.
Accordingly, Sebi found that Axis Trustee Services Ltd flouted the REIT regulations.
Embassy Office Parks Management Services Pvt Ltd (EOPMSPL) is the manager of Embassy Office Parks REIT, which was sponsored by Bengaluru-based realty firm Embassy Group and global investment firm Blackstone.
In an interim order passed by Sebi on November 4, 2024, the markets watchdog directed the manager to suspend Maiya and appoint an interim CEO. Subsequently, Ritwik Bhattacharjee was named interim CEO.
Bhattacharjee was later succeeded by Amit Shetty as CEO of Embassy Office Parks REIT.
