Religare Enterprises Denies Issuing 8% Stake Of Religare Finvest To Chairman Rashmi Saluja

Religare Enterprises Ltd on Wednesday said its Chairman Rashmi Saluja has not been issued any additional stock options of Religare Finvest, rebutting a call for an investigation by the Burman family into the alleged allotment of 8 per cent stake through Employee Stock Ownership Plans (ESOPs) in violations of rules.

In a statement, Religare Enterprises Ltd (REL) said the approval sought at the AGM of RFL (Religare Finvest Ltd) held on September 26, 2023 was to seek enabling approval of shareholders for the proposed grant of ESOPs of RFL to Rashmi Saluja under the RFL ESOP Plan 2019.

RFL is a subsidiary of Religare Enterprises. REL chairperson Saluja is also chairperson and MD of RFL.

At the AGM of RFL, the shareholders "amongst 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 CMD (Saluja), equivalent or exceeding to 1 per cent of the current issued share capital of RFL".

"Subsequent to the passing of enabling special resolution by the shareholders of RFL with respect to 'Item No 5', RFL has not placed any proposal with NRC till date for grant of above mentioned 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 company said in a statement.

Earlier in the day, Burman family called for an investigation into the alleged allotment of 8 per cent share of RFL to REL Chairman Rashmi Saluja.

"The allotment of approximately 2.14 crore shares, constituting (around) 8 per cent of Religare Finvest Ltd (RFL), to Rashmi Saluja through Employee Stock Ownership Plans (ESOPs) requires investigation in terms of compliance with SEBI Takeover Regulations," a statement from the Burman family spokesperson said.

Terming the allotment as "unfortunate", the Burman family, the largest shareholder of REL in which it collectively owns 21.24 per cent through its entities, said the process "raises a question mark on the management and the independence of the independent directors" of the diversified financial services firm.

The Burman family, the promoter of Dabur India and other entities such as Eveready Industries, had in September announced a Rs 2,116 crore open offer to the shareholders of Religare Enterprises Ltd (REL) to acquire up to 26 per cent stake in the company.

"It is unfortunate that a solitary executive has cornered a significant quantum of remuneration through ESOPs at REL, Care Health Insurance Limited, and RFL, all without approval and requisite disclosure to REL shareholders," the Burman family spokesperson said.

Further, the spokesperson said, "This raises a question mark on the management and the independence of the independent directors and their complicity in such unjustified dole outs."

Rashmi Saluja is also the Chairperson and Managing Director (CMD) of Religare Finvest.

When contacted, REL asserted its board upholds the highest standards of corporate governance and compliances in all transactions and stands by its management.

According to a media report, Saluja got allotted approximately 2.14 crore shares, constituting 8 per cent of RFL, an unlisted subsidiary of REL, through ESOPs, a day after the Burman family announced an open offer to buy additional shares for the control of the conglomerate.

"REL board should answer the shareholders whether there exist more instances of ESOP issuances to entities and potential conflicts of interest. These actions have eroded trust and confidence in the REL board, necessitating an urgent need to restore credibility," the Burman family spokesperson said.

The ESOP shares are valued at around Rs 250 crore and is the bone of contention between Religare board led by Saluja and the Burman family, which has invested around Rs 900 crore to Rs 1,000 crore into the financial service provider.

Earlier, Burman family had approached market regulator SEBI through its entities, seeking a probe into the sale of shares by Chairman Rashmi Saluja of the diversified financial services day after they informed about the open offer.

Later, some independent directors from Religare also raised their concerns over the open offer from Burmans and approached the market regulator.

Burman family had also alleged vested interests are attempting to block their acquisition of a stake in REL, after two senior members were booked in the multi-crore Mahadev app case. The family had said it is shocked by what it termed as an "arm twisting" move and denied any involvement in the case.

In the AGM of Religare Finvest, which took place on September 26, a special resolution was placed for issuance of 2.14 crore shares to Rashmi Saluja, Chairman and Managing Director of the company, through ESOPs

As the allotment was exceeding the prescribed limit of one per cent of the total issued share capital of the company, a special resolution was needed, said the notice of the said AGM.