SEBI Investigates Embassy REIT and WeWork India Following S&W Complaint

by Priya Bhatiya

Posted on August 8, 2025

Sterling & Wilson Renewable Energy Ltd (S&W) has filed formal complaints with SEBI against both Embassy Office Parks REIT and IPO-bound WeWork India, alleging that both entities failed to disclose crucial information to investors and regulators.

Key points:

• The Dispute: The issue centers on a ₹100 crore payment dispute involving Embassy Energy Pvt Ltd (EEPL), a subsidiary of Embassy REIT, and S&W related to a solar project.
• Criminal Proceedings: The Economic Offences Wing (EOW) filed a chargesheet against Embassy Group promoters Jitendra and Karan Virwani. Both have leadership roles in Embassy REIT and WeWork India.
• Lapse in Disclosures: S&W claims Embassy REIT did not fully inform investors about the payment dispute or the ensuing criminal action. Separately, S&W alleges WeWork India failed to mention these legal developments in its Draft Red Herring Prospectus (DRHP) during the IPO process—a violation of disclosure norms.
• Regulatory Scrutiny: SEBI intervened after identifying repeat lapses in timely disclosures at Embassy REIT. In November 2024, SEBI suspended Embassy REIT CEO Aravind Maiya for compliance failures, which included delaying public announcements about related regulatory actions by as much as 53 days, especially in connection with a National Financial Reporting Authority (NFRA) investigation.
• IPO Delay: Due to these concerns, SEBI put WeWork India’s IPO application in abeyance in March 2025, demanding enhanced transparency and revised disclosures from the company.
• Current Status: Following compliance with improved disclosure standards and SEBI’s review, WeWork India’s IPO process was allowed to resume in July 2025.

These events highlight the regulator’s focus on stricter supervision of disclosure requirements—especially for interlinked promoter groups—and demonstrate the consequences of lapses for both ongoing and planned public offerings. SEBI’s actions serve as a signal to the market: significant legal and financial risks must be promptly and transparently disclosed to protect investor interests.

Here are further details about the S&W (Sterling & Wilson Renewable Energy) complaints against Embassy REIT and WeWork India, drawing on regulatory, legal, and financial developments:

Background & Payment Dispute

• Project Origins: Embassy Energy Pvt Ltd (EEPL), a subsidiary of Embassy REIT, commissioned a 100MW solar project and entered into a contract with IL&FS Solar Ltd (ISPL), who subcontracted work to IL&FS Energy Development Company Ltd (IEDCL). IEDCL, in turn, subcontracted Sterling & Wilson (S&W) for the project execution.
• Unpaid Invoices: S&W raised invoices from December 2017 to November 2018, totaling nearly ₹100 crore. Due to lack of payment from IEDCL, S&W suspended work in October 2018. Embassy Energy issued a letter in January 2019, promising to indemnify and clear overdue payments if they weren’t settled by then. The liabilities remained unresolved, prompting S&W’s legal action and later criminal complaints.

Legal & Regulatory Proceedings

• FIR & Chargesheet: S&W lodged a police complaint (FIR) against Embassy Group promoters Jitendra and Karan Virwani in March 2023. The case, relating to alleged cheating and criminal breach of trust, was transferred to the Economic Offences Wing (EOW) of Mumbai Police, leading to a formal chargesheet and further legal proceedings in 2024. According to official records, one of the company’s promoters was arrested in July 2024 and a prosecution complaint filed in September 2024.
• High Court Action: Embassy Group filed a quashing petition to halt criminal proceedings, arguing that S&W, as a subcontractor of IL&FS and not in direct contract with Embassy, did not have grounds to claim direct payment. The High Court issued notice to S&W but did not immediately stay proceedings. A parallel criminal matter against Jitendra Virwani proceeded in Karnataka courts as well.

SEBI Scrutiny Over Disclosures

• Embassy REIT: SEBI found multiple compliance failures, including delayed disclosure of a National Financial Reporting Authority (NFRA) order that resulted in the CEO’s (Aravind Maiya’s) removal in November 2024. Disclosure delays included:
  • 53-day delay reporting the NFRA order,
  • 35-day delay providing its view on the CEO’s “fit and proper” status,
  • 11-day delay on a regulatory letter.
• WeWork India IPO: WeWork India, tightly linked to Embassy promoters, filed for an IPO in January 2025. S&W alleged that WeWork India failed to disclose ongoing legal developments and the EOW criminal case in its IPO prospectus (DRHP), breaching SEBI’s disclosure standards. Consequently, SEBI put the IPO in abeyance in March 2025, pending additional disclosures and clarifications.

IPO & Recent Developments

• SEBI Clearance: After WeWork India amended its disclosures, SEBI cleared the IPO in July 2025. The IPO, an offer-for-sale, allows major shareholders (Embassy Buildcon and a WeWork Global affiliate) to offload shares but brings no new funds to WeWork India itself.
• Market Impact: These events have focused investor and regulatory attention on related-party risks, stringent disclosure, and governance oversight in public offerings involving complex promoter ecosystems.

Summary Table

This sequence of events highlights both the complexity and strictness of contemporary Indian securities regulation, especially regarding disclosure of interconnected legal and financial risks.

Ref: S&W flags non-disclosures by Embassy REIT, IPO-bound WeWork India in complaint to SEBI