SEBI says Embassy REIT bosses are fit

What does "fit and proper" mean?

"Fit and proper" is a regulatory test of an executive's integrity and honesty. Until April 16, 2026, merely having a pending chargesheet or prosecution complaint automatically made someone fail it. After that date, the rules changed: a pending case alone is no longer grounds for disqualification, with nothing more required, like a conviction.

Who filed the petition against who?

Two investors, Chayan Upadhyay and Shashank Garg, filed petitions against SEBI over who runs Embassy REIT. They argued that Jitendra Virwani and Karan Virwani, the father-son duo connected to Embassy Office Parks REIT, should be disqualified as not 'fit and proper' under old rules. SEBI replied in court, saying the men pass under amended rules.

How has SEBI responded?

SEBI told the Bombay High Court it examined the complaints after an April 2026 rule change and found nothing to disqualify the Virwanis under the amended rules. It did flag a disclosure lapse and issued advisory letters. But its affidavit doesn't say whether they'd have been disqualified under the earlier, stricter rules.

Is changing a rule during an investigation normal?

Yes, regulators do revise rules while investigations are underway, and SEBI says that is what happened here. It changed the rule in April 2026 after public consultation, where 45 of 63 comments agreed. SEBI says the change was general, not aimed at Embassy REIT, and applied the rules in force when it finished its review.

What happens to Embassy REIT if the court says no?

If the Bombay High Court rules against SEBI, its decision to clear the Virwanis could be struck down, meaning the regulator would have to re-examine their fitness under the earlier, stricter rules that were in force when the complaints were filed. That risk keeps the matter uncertain until the court rules. No verdict has been given yet.