**S&W Accuses Embassy REIT and WeWork India of Non-Disclosure**
Sterling & Wilson Renewable Energy Ltd (S&W) has lodged complaints against Embassy Office Parks REIT and WeWork India, alleging that they failed to disclose critical information to investors. These complaints were submitted to the Securities and Exchange Board of India (Sebi) and are linked to a ₹100 crore payment dispute concerning a solar project managed by Embassy Energy Pvt Ltd (EEPL), a subsidiary of Embassy REIT.
The allegations, made on July 22, arise from a previous complaint that resulted in a chargesheet filed by the Economic Offences Wing in 2023 against Embassy Group promoters Jitendra Virwani and his son Karan Virwani, who also heads WeWork India. S&W claims that WeWork India did not include this significant development in the draft red herring prospectus for its initial public offering earlier this year. Additionally, S&W filed a separate complaint with Sebi on April 3, arguing that due to the ongoing investigation into the Virwanis, they should be disqualified from Embassy REIT under the ‘fit and proper person’ criteria. Jitendra Virwani serves as the non-executive chair of Embassy Office Parks REIT, while Karan Virwani is a director on the boards of the REIT’s sponsor and management entities.
The non-disclosure of material information, which could significantly influence the company’s securities or investor decisions, may violate SEBI regulations and could affect the decision-making of REIT unit holders and potential IPO investors. S&W’s promoters include Reliance New Energy Ltd (32.5%), Shapoorji Pallonji And Co Pvt Ltd (6.94%), and the Daruvala family (6.3%).
**Background of the Dispute**
The dispute originates from a 100-MW solar plant built by S&W in Karnataka, currently operated by EEPL. The construction was contracted to S&W by IL&FS Energy Development Co Ltd, which was responsible for funding and constructing the plant. EEPL was to repay IL&FS Solar Pvt Ltd, a subsidiary of IL&FS Energy, with interest in monthly installments. However, IL&FS Energy encountered financial difficulties in 2018 and failed to make payments to S&W, accumulating dues of ₹100 crore.
S&W claims it halted work at the site when payments ceased but resumed after EEPL guaranteed payments in the event of IL&FS Energy’s default. The IL&FS Group subsequently declared insolvency later that year. When EEPL failed to settle its dues to S&W, the latter took the matter to bankruptcy court, where the Bengaluru Bench of the National Company Law Tribunal ruled in favor of EEPL. S&W then appealed the decision to the National Company Law Appellate Tribunal in Chennai, which also ruled in favor of EEPL in 2023. S&W has since escalated the matter to the Supreme Court.
**Embassy Group’s Response**
The Embassy Group has categorically denied all allegations regarding the non-payment of dues.
**Conclusion**
The ongoing legal disputes and allegations of non-disclosure raise significant concerns about transparency and governance within the involved entities. As the situation develops, it will be crucial for investors and stakeholders to monitor the outcomes of these complaints and their implications for the companies involved.
**FAQ**
**What are the main allegations made by S&W against Embassy REIT and WeWork India?**
S&W alleges that both Embassy REIT and WeWork India failed to disclose important information regarding a ₹100 crore payment dispute related to a solar project, which could impact investor decisions and violate SEBI regulations.
