Religare Enterprises refers Burmans’ open offer petition to SEBI, RBI
Business: After dilly-dallying for nearly a year, financial services firm Religare Enterprises has finally submitted its application to regulators for an open offer by Dabur’s Burman family, people aware of the development said. According to sources, Religare Enterprises has submitted the application to the Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI) and Reserve Bank of India (RBI). The move follows directions passed by the Securities Appellate Tribunal last month and an order issued by SEBI in June against the management. “Religare Enterprises has submitted its application for the open offer. They had to comply with the tribunal’s order,” a SEBI source said. According to an update on SEBI’s website, Religare Enterprises’ writ petition in the Delhi High Court in the matter is listed for hearing on August 20. The open offer can be processed after that as the matter is still sub judice.
Email queries sent to the company and financial regulators did not elicit a response till the time of publication.
Earlier, REL had said it would apply for an open offer before regulators with concerns over the ‘fit and proper’ status of the acquirer Burman family. The matter relates to the purchase of an additional 5.27 per cent stake in the open market by four entities owned by the Burman family in September 2023, creating an obligation for an open offer as they already held 21.54 per cent stake in REL. The Burman family had announced an open offer to acquire an additional 26 per cent. Currently, the Burman family is the largest shareholder in REL but has no representation on the board. REL Executive Chairperson Rashmi Saluja has faced the ire of several regulators in the past few months. In July, IRDAI imposed a fine of Rs 1 crore on REL subsidiary Care Health Insurance citing violations and directed the insurer to buy back 7.66 million shares allotted to Rashmi Saluja within a month.
There is a ‘complete lack of cooperation and support from REL’
The insurance regulator had also forbidden the company from allocating ESOPs to Saluja as a non-executive director. According to sources, the market regulator is also investigating allegations of insider trading levelled against Saluja. Burman had earlier complained to Sebi that he has ‘complete lack of cooperation and support from REL’, while the REL board had made multiple representations to Sebi against Burman’s move to acquire more shares in October 2023. This was on the ground that they do not fulfil the ‘fit and proper’ criteria to become the promoter of a financial company with a major license for insurance, lending and broking business. SEBI’s interim order cum show cause notice dealt with these allegations and termed them without any basis
