The CEO of Embassy REIT, Aravind Maiya, has been suspended due to his involvement in an unrelated fraud case from a few years back. Maiya was an auditor at BSR & Co, which was the auditor for Coffee Day Enterprises Ltd (CCD), a company owned by VG Siddhartha. Siddhartha had embezzled money from CCD to another company owned by his dad. Maiya, who was responsible for ensuring that CCD’s financials were correct, did a terrible job. He overlooked shenanigans because Siddhartha hadn’t technically written those cheques from CCD’s chequebook but from its subsidiary’s chequebook. Eventually, Embassy REIT had to ask Aravind Maiya to step down as the CEO because SEBI didn’t give it an option. However, instead of firing him, Embassy REIT appointed him as the Head of Strategy.
The regulator’s requirement is that anyone who manages someone else’s money should not have defrauded anyone in the past. In this case, Aravind Maiya was found guilty of professional misconduct by the National Financial Reporting Authority (NFRA), debarred from being an auditor, and penalized with ₹50 lakh ($60,000). Despite this, Embassy REIT argued that its CEO didn’t need to be a “fit and proper person.” However, SEBI wanted the REIT’s CEO to be a “fit and proper person,” which is just a bunch of floor criteria for not having defrauded anyone or being a criminal. Eventually, Embassy REIT had to comply with SEBI’s directive and ask Aravind Maiya to step down as the CEO.
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