Religare Enterprises has received a note from the Competition Commission of India (CCI), inquiring about whether the Burman family, its largest shareholder, has explored the possibility of a company merger, expressed interest in involvement in management, or proposed obtaining representation on the board.
The CCI has also asked for records of correspondence exchanged between the Burmans and Religare from October 13, 2017, to September 25, 2023, which corresponds to the time frame when the promoters of the FMCG giant Dabur acquired shares in the financial services company, as per a report by the Economic Times.
The regulatory body noted that the Burmans failed to disclose their initial acquisition of Religare shares and are currently seeking authorization for their intended acquisition of a 5 per cent stake through secondary market transactions. Additionally, they are proposing an open offer to acquire an extra 26 per cent from the company's public shareholders.
Advertisement
As per sources cited in the report, Religare had confirmed the receipt of a CCI letter, stating that the company has responded and refrains from further comment. Despite no direct communication with the Burmans on merger or management matters, Religare's response suggests the Burmans' actions, from initial share acquisitions to planned stake purchases and the open offer, indicate an intention to gain 'control' of the financial services unit.
On April 19, 2018, the Burmans initiated their initial investment in Religare by subscribing to share warrants equivalent to approximately a 10 per cent stake in the company. These warrants were later converted into equity.
Advertisement
Following their initial investment, the Burmans raised their ownership to 14 per cent and subsequently to approximately 22 per cent, constituting their fourth acquisition. Subsequently, they disclosed plans for purchasing 5 per cent of Religare shares through the secondary market and initiating an open offer for an additional 26 per cent stake.
Just one email a week