The Securities and Exchange Board of India (SEBI) requested documentation and supporting evidence from REL for the claims
The Burmans, who had made an open offer to take over the company in September, are the target of accusations of fraud and other violations made by the independent directors of Religare Enterprises Ltd (REL). The in correspondence with regulators like the RBI, Sebi, and the insurance watchdog.
That creates the conditions for a potentially protracted takeover fight for a company that possesses highly sought-after licences to lend money, offer insurance, and act as a stock market middleman, according to a report by the Economic Times.
The Burmans have refuted the allegations.
"We are surprised and disappointed at these allegations," a spokesperson for the Burman family said in a statement. "These allegations are false, frivolous and defamatory."
In a letter dated October 18, the Securities and Exchange Board of India (SEBI) requested documentation and supporting evidence from REL for the claims. Additionally, SEBI has asked JM Financial, the open offer manager, to respond to the charges in the letter.
Additionally, JM Financial has refuted the claims of improper behaviour and cooperation.
By August, the affluent Burman family—promoters of FMCG giant Dabur—had amassed a 21.5 per cent share in REL through a number of different businesses. It acquired an additional 5.27 per cent share in September, which prompted an obligatory public offer to purchase an additional 26 per cent of the company. The SEBI must approve this.
REL owns four significant companies. Religare Housing Development Finance Corp provides house loans, Religare Finvest lends money to small businesses, Religare Health Insurance provides health insurance, and Religare Broking is a retail stock brokerage.
The Singh brothers of Ranbaxy and Fortis, Malvinder and Shivinder, formed and managed REL until 2018. They were sentenced to prison for fraud including the embezzlement of money from their firms. Lenders' invocation of commitments caused them to lose control of REL.
To recoup assets that had been embezzled from the company and steer it towards safety, an independent director board was established. The board has performed well, and the market has responded warmly, under the direction of executive chairperson Rashmi Saluja.