SEBI on 14th February, 2023 has issued the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2023. The amendment provides that “Independent director” in case of a Real Estate Investment Trusts company means a director, other than a nominee director of the investment manager:
(i) Who, in the opinion of the Board of Directors of the Manager, is a person of integrity and possesses relevant expertise and experience;
(ii) who is not or was not a sponsor of the REIT, a promoter of parties to the REIT, their holding, subsidiary or associate or a member of the sponsor group of the REIT;
(iii) who is not related to the REIT, its Holdco and/or SPV, parties to the REIT, its holding company or associate or their promoters or directors;
(iv) who, apart from receiving a director’s remuneration, does not have or has had any material pecuniary relationship with the REIT, its Holdco and/or SPV, parties to the REIT, its holding company, the subsidiary or associate or their promoters or
directors, during the three immediately preceding financial years or during the
current financial year;
(v) none of whose relatives-
(A) is holding securities of or interest in the REIT, its Holdco and/or SPV , parties
to the REIT, their holding Company, subsidiary or associate during the three immediately preceding financial years or during the current financial year of
face value in excess of fifty lakh rupees or two percent of the unit capital of the
REIT, two percent of the paid-up capital of the parties to the REIT, their
holding Company, subsidiary or associate or Holdco and/or SPV respectively
or such higher sum as may be specified;
(B) is indebted to the REIT, its Holdco and/or SPV, parties to the REIT, its holding
company, subsidiary or associate or their promoters or directors, during the
three immediately preceding financial years or during the current financial
year, in excess of such amount as may be specified;
(C) has given a guarantee or provided any security in connection with the
indebtedness of any third person to the REIT, its Holdco or SPV, parties to the
REIT, its holding company, subsidiary or associate or their promoters or
directors, during the three immediately preceding financial years or during the
current financial year, for such amount as may be specified; or
(D) has any other pecuniary transaction or relationship with the REIT, its Holdco
and/or SPV, parties to the REIT, its holding company, subsidiary or associate
amounting to two percent or more of its gross turnover or total income:
Provided that the pecuniary relationship or transaction with the REIT, its
Holdco and/or SPV, parties to the REIT, its holding company, subsidiary,
associate or their promoters or directors in relation to points (A) to (D) shall not
exceed two percent of its gross turnover or total income or fifty lakh rupees or
such higher amount as may be specified from time to time, whichever is lower.
(vi) who, neither himself or herself, nor whose relative(s)—
(A) holds or has held the position of a key managerial personnel or is or has been
an employee of the Holdco and/or SPV, parties to the REIT or its holding,
subsidiary or associate or any company belonging to parties to the REIT, in any
of the three financial years immediately preceding the financial year in which
he/she is proposed to be appointed:
Provided that in case of a relative who is an employee other than a key
managerial personnel, the restriction under this clause shall not apply for
his/her employment;
(B) is or has been an employee or proprietor or a partner, in any of the three
financial years immediately preceding the financial year in which he/she is
proposed to be appointed, of –
(1) a firm of auditors or company secretaries in practice or cost auditors of
the REIT, its Holdco and/or SPV , parties to the REIT, its holding
company, subsidiary or associate; or
(2) any legal or a consulting firm that has or had any transaction with
the REIT, its Holdco and/or SPV , parties to the REIT, its holding company,
subsidiary or associate amounting to ten per cent or more of the gross
turnover of such firm;
(C) holds together with his relatives two per cent or more of the total voting power
of the REIT, its Holdco and/or SPV, parties to the REIT;
(D) is a chief executive or director, by whatever name called, of any non-profit
organisation that receives twenty-five per cent or more of its receipts or corpus
from the REIT, its Holdco and/or SPV, parties to the REIT, its holding company, subsidiary or associate, any of its promoters, directors or that holds two per cent or more of the total voting power of the REIT, its Holdco and/or SPV,
parties to the REIT;
(E) is a material supplier, service provider or customer or a lessor or lessee of the
REIT, its Holdco and/or SPV, parties to the REIT, its holding company, subsidiary or associate;
(vii) who is not less than 21 years of age; or
(viii) who possesses such other qualifications as may be specified by the Board.
