The order mandates that EOPMSPL appoint an interim CEO with immediate effect. SEBI’s action stems from an investigation by the National Financial Reporting Authority (NFRA), which found “serious lapses” in Maiya’s role as engagement partner in the audit of Coffee Day Enterprises Ltd (CDEL) during FY19. An engagement partner is the person at the audit firm who leads the assignment.
The NFRA’s investigation uncovered multiple professional misconduct issues within CDEL’s statutory audit, leading to its August 2024 decision to bar Maiya from auditing for a maximum 10-year period.
The NFRA noted that the audit team under Maiya’s leadership failed to flag significant fund diversions at CDEL, resulting in substantial investor losses. SEBI’s interim order, issued on November 4, reinforces the NFRA’s concerns about Maiya’s suitability in leadership roles within the financial sector.
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According to SEBI’s whole-time member Ashwani Bhatia, “The NFRA order brings out knowing violations of applicable audit norms which failed to flag a massive fraud at a listed company while Aravind Maiya was in a special position to discern given his professional assignment and domain knowledge.” SEBI’s findings emphasise the risk to public interest and investor trust posed by Maiya’s alleged audit failures.
The SEBI order further states, “The Order also leads to a reasonable inference that Mr. Aravind Maiya failed to act in public interest. Instead, he acted in a manner which harmed ordinary investors and shareholders in the securities market.”
SEBI cited Clause 3 of Schedule II of the Intermediaries Regulations as the basis for Maiya’s disqualification until his record is cleared at an appellate forum.
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In addition to his suspension, SEBI directed Embassy Office Parks Management Services to ensure strict compliance with “fit and proper” standards for key management roles.
The order remains in effect until further notice or until the NFRA order is overturned on appeal.
(Edited by : Shoma Bhattacharjee)