The Securities and Exchange Board of India (Sebi) has issued a warning to investors regarding Strata, a commercial real estate platform founded by Sudarshan Lodha and Priyanka Rathore, after the company surrendered its licence as a small and medium real estate investment trust (SM REIT) due to a legal controversy. &nbsp;
&ldquo;Pursuant to certain news reports and review of certain legal proceedings against the promoter of SM REIT, SEBI engaged with Strata SM REIT, its independent director, compliance and other officers and the trustee. After the engagement and discussions, Strata SM REIT has surrendered its certificate of registration as an SM REIT and will not hold out or represent itself as a SEBI-regulated intermediary,&rdquo; SEBI said in a statement.
&ldquo;This communication is being issued in the interest of investors advising them to exercise caution while dealing with the entity,&rdquo; SEBI said.
Strata had registered as a Small and Medium Real Estate Investment Trust (SM REIT), a new framework introduced by Sebi for fractional ownership platforms to offer real estate investment products. 
However, following certain concerns and discussions with Sebi, Strata has surrendered its registration.
Strata received Sebi approval in January and had planned to launch six schemes during the current financial year. 
So far, it has not yet launched any SM REIT schemes nor migrated any pre-existing fractional real estate entities to the SM REIT framework, the SEBI statement added.
The legal dispute involving SM REIT arose with a Tamil Nadu-based real estate firm engaged in acquiring and developing land for industrial and warehousing projects.
According to the anticipatory bail order of the Madras High Court, a case was filed against Lodha for allegedly seeking information by impersonating as a SEBI official and creating a fake email ID under her name.
However, Lodha&rsquo;s counsels denied the allegations and argued that as the complainant did not succeed in arbitration and other civil proceedings, it filed a &lsquo;false complaint&rsquo; in order to &lsquo;arm-twist and give a criminal colour to the dispute.&rsquo;
&ldquo;In light of the ongoing matter, we have voluntarily surrendered our SM Reit licence without admitting or denying any wrongdoing, as a measure of abundant caution.&nbsp;Upon conclusion of the current litigation, we intend to apply for a fresh licence at a future date. This matter does not affect the existing investments with Everstrat,&rdquo; Strata said in a statement on Wednesday.
&mdash;IANS
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May 15, 2025 | 10:06 IST