Burman Family Raises Concerns over Allotment of 8% Stake in Religare Finvest to Rashmi Saluja through ESOPs

IANS 04 January 2024

Economy & Nation

The Burman family, which collectively owns 21.24% of Religare Finvest Limited (RFL) through its entities, has raised concerns about the alleged allotment of 8% of RFL shares to Rashmi Saluja, the chairperson of Religare Enterprises Limited (REL), through employees stock ownership plans (ESOPs), Goodreturns reported.

They questioned the compliance with the Securities and Exchange Board of India (SEBI) Takeover Regulations and expressed doubts about the management and independence of the independent directors of REL.

The Burman family, the promoters of Dabur India and other entities, had announced an open offer in September 2023 to acquire up to 26% stake in REL for Rs2,116 crore. They expressed disappointment that a single executive had received a significant amount of remuneration through ESOPs at REL, Care Health Insurance Limited, and RFL without proper approval and disclosure to REL shareholders, Goodreturns reported.

The ESOP shares in question are valued at approximately Rs250 crore and have become a point of contention between the Religare board led by Ms Saluja and the Burman family which has invested around Rs900 crore to Rs1,000 crore in the financial service-provider.

Prior to this, the Burman family had approached market regulator SEBI to investigate the sale of shares by Ms Saluja after the announcement of the open offer. Additionally, some independent directors from Religare had also raised concerns over the open offer from the Burmans and sought the intervention of SEBI, Goodreturns reported.

The approval sought at the AGM of RFL held on 26 September 2023 was to seek enabling approval of the shareholders for the proposed grant of ESOPs of RFL to Ms Saluja under the RFL ESOP Plan 2019.

The notice for the aforesaid AGM was issued on 1 September 2023, and was submitted to the BSE accordingly by RFL, as per a statement issued by Religare Enterprises Limited.

Under the Companies Act, 2013 and the SEBI ESOP Guidelines, the approval of shareholders of a company by way of separate resolutions is required in case of grant of options to identified employees, during any one year, equal to or exceeding 1% of the issued capital of the company at the time of grant.

“We request you to kindly note that the AGM of RFL was convened on September 26, 2023 and the shareholders of RFL, among other things, passed the special resolution (item No. 5) for approval for grant of 2,14,11,555 options under RFL ESOP Plan 2019 to the CMD, equivalent or exceeding to 1 per cent of the current issued share capital of RFL," Religare Enterprises said.

The explanatory statement of item No. 5 of the said AGM notice also states that once all the requisite approvals are in place, NRC can accordingly grant the ESOP to the CMD.

Subsequent to the passing of enabling special resolution by the shareholders of RFL w.r.t. item No. 5, RFL has not placed any proposal with the NRC till date for grant of abovementioned ESOPs to CMD.

Since no new shares were issued/allotted in the matter, there is no contravention of the Reg 26 (6) of the SEBI Takeover Regulations, the statement said.

A statement by the board of directors of Religare Enterprises said, “The Board of Directors endorses the statement of REL and reiterates that it upholds high standards of corporate governance and compliances."

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