The Competition Commission of India grants conditional approval for the Burman family's acquisition of a 31.27% additional stake in Religare Enterprises, with legal experts highlighting the possibility of revocation if material information was omitted.
The Competition Commission has cleared without prejudice the additional stake purchase by the Burman family entities in Religare, and if it is found later that any material information was omitted, then the regulator has the power to revoke the approval order, according to a legal expert.
The approval came against the backdrop of the intense feud between Religare Enterprises and the Burman family over taking control of the company.
On Tuesday, the Competition Commission of India (CCI) approved the acquisition of 31.27 per cent of additional stake in Religare Enterprises by four entities of Dabur India promoter Burman family.
"CCI's approval has been issued without prejudice to any subsequent action pertaining to gun-jumping (section 43A), and contraventions regarding provision of information, including false statement or omission to furnish material information (sections 44 and 45)," Gautam Chawla, a partner in the competition practice at Trilegal, said in a statement on Wednesday.
In the case, it is found that false information was submitted, or material information was omitted, the regulator has the power to revoke its approval order as was done in a previous instance, he said.
Meanwhile, a Religare Enterprises spokesperson said the release issued by CCI regarding the stake purchase clearly stipulates that the "approval is without prejudice to the proceedings that may be initiated under Section 43A, 44 and/or 45 of the Competition Act, 2002".
The spokesperson said it was in connection with the combination notice issued by the acquirers forming part of the Burman Group in relation to the open offer to the shareholders of Religare Enterprises.
These sections pertain to powers of CCI to impose penalties for non-furnishing of information or submission of false information regarding combinations.
A Burman Family spokesperson said, "The approval from CCI is a reaffirmation of our commitment to Religare Enterprises Limited (REL) and its stakeholders. It also validates our vision for REL, which is aligned with the long-term interests of all the stakeholders".
The family remains committed to seamlessly completing the open offer and directing REL towards sustained success, the spokesperson said.
"We take this opportunity to urge the Board to act in a neutral manner and not solely at the behest of certain members of the senior management," the Burman family spokesperson added.