Market regulator Securities and Exchange Board of India (SEBI) has directed Religare Enterprises Ltd’s (REL) former executive chairperson Dr Rashmi Saluja, to disgorge ₹1.99 crore, the wrongful gain in the form of losses averted, along with 12% simple interest. SEBI also imposed a penalty of ₹40 lakh on her for alleged insider trading violations linked to trades in REL shares ahead of the Burman group’s open offer announcement in September 2023.
In its
final order, Kamlesh C Varshney, whole-time member (WTM) of SEBI, says, “Dr Saluja, during cross-examination, was not able to find any defect in the deposition of Dr AC Burman and Arjun Lamba about their claim of communication of an open offer in the meeting of 20 September 2023. While she was curious a month back about the open offer, she took the news of the open offer on 25 September 2023 without any element of surprise. Further, Dr Saluja was in a position to calculate the base offer price based on the publicly available information. Subsequently, the sale of REL shares by her on the immediate next day is to be seen along with the fact that the base offer price was known to be much lower than the market price. All the above acts put together cross the threshold of preponderance of probability to arrive at the conclusion that Dr Saluja was in possession of unpublished price-sensitive information (UPSI) and sold shares while in such possession. This finding further gets support from the fact that she did not carry out any other trades in the scrip of REL during the investigation period.”
According to the regulator, she sold more than 12.93 lakh shares of REL before the public announcement of the open offer, thereby allegedly avoiding losses estimated at around ₹1.99 crore.
The case originated from a complaint filed by members of the Burman group, promoters of Dabur India Ltd, who informed SEBI in November 2023 about suspected insider trading in REL shares. The investigation covered the period between June and December 2023.
According to the order, the UPSI related to the Burman group’s proposed open offer to acquire an additional 26% stake in REL at ₹235 per share. SEBI identified the UPSI period from 8 September 2023 until the public announcement made before market hours on 25 September 2023.
SEBI relied on WhatsApp chats, call data records and statements recorded during the investigation. The regulator referred to multiple meetings and communications between Dr Saluja and representatives of the Burman group prior to the open offer announcement.
The order specifically cited a meeting held at The Oberoi hotel in New Delhi on 20 September 2023 involving Dr Burman and Mr Lamba. SEBI says hotel booking records, mobile location data and witness statements corroborated that discussions concerning the proposed open offer had taken place.
SEBI observed that shortly after the meeting, Dr Saluja sold 6.53 lakh REL shares on 21 September 2023 and another 6.39 lakh shares on 22 September 2023. The combined transaction value of the trades was nearly ₹34.70 crore.
The regulator also noted that REL shares fell sharply after the open offer announcement, declining 6.85% on 25 September 2023 and weakening further in the following trading session.
Dr Saluja denied the allegations and argued that the share sales were undertaken to fund the exercise of employee stock options in Care Health Insurance Ltd, an unlisted subsidiary of REL. She maintained that she became aware of the open offer only after the public announcement on 25 September 2023.
She also contended that the allegations were linked to the ongoing corporate battle for control of REL and challenged the evidentiary value of certain WhatsApp messages relied upon during the investigation.
The SEBI proceedings come amid a prolonged battle for control of Religare Enterprises between the Burman family and the existing management led by Dr Saluja. The dispute had earlier raised broader governance and regulatory questions surrounding the company and its leadership. (Read:
Will Regulators Glare or Gloat at Religare?)
However, SEBI rejected the defence and held that the evidence on record established that Dr Saluja was in possession of UPSI before executing the trades. The regulator concluded that the transactions violated provisions of the SEBI Act and the SEBI (Prohibition of Insider Trading) Regulations.
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