InGovern raises concern over AGM delay; Religare calls report manipulative

Delay is particularly significant because REL executive chairperson Rashmi Saluja was due for re-appointment as she will retire by rotation at the originally scheduled AGM in September, report said

Proxy advisory firm InGovern has raised concern over Religare Enterprises postponing its 40th annual general meeting "without any valid reason" and has sought a Sebi probe into the matter, but the company termed the report manipulative.

The regulator may examine the decision-making processes that led to the delay, as well as the company's actions regarding share allotments and Employee Stock Ownership Plans (ESOPs), the advisory firm said in a report.

Responding to the report, Religare Enterprises chairperson Rashmi Saluja said, "The report is manipulative in nature and is a malicious attempt to hurt the credibility of the company and its leadership. We are compliant with all laws and regulations and continue to uphold the sanctity of the High Court of Delhi, and hence will not be able to speak on matters which are sub-judice."

"Short selling is becoming a trend to undermine the growing potential of Indian companies under different reasons and we would like really to understand the actual agenda of InGovern by publishing a misleading report like this, she added.

Under the leadership of Saluja and the board, the company has worked on strong corporate governance, efficient business models and a performance-driven mind set, resolving legacy issues of the group, enhancing operations and bringing all businesses back to stability and more while creating value for shareholders, Religare Enterprises Ltd (REL) said in a statement.

Shares of REL fell from Rs 50 in 2018 to a low of Rs 17 in March 2020, but have rebounded to Rs 276.95 as of today, it said.

REL has deferred its annual general meeting (AGM) by three months to December 2024 from September 2024.

The delay is particularly significant because REL executive chairperson Rashmi Saluja was due for re-appointment as she will retire by rotation at the originally scheduled AGM in September, the report said.

"This decision has left shareholders frustrated, as the company has not provided a valid reason for the delay, especially since the financial accounts were already filed with the exchanges," it stated further.

As the only non-independent director, her position requires re-appointment at each AGM, making the timing of this delay critical, it said.

REL is locked in a battle with Burman family-controlled firms over the management control of the financial services firm.

Burmans, the promoter of Dabur, who hold around 25 per cent of REL through four entities -- MB Finmart, Puran Associates, VIC Enterprises, and Milky Investment and Trading Co -- announced an open offer on September 25, 2023, to acquire a 26 per cent stake from public shareholders.

Soon after the open offer bid, Burmans complained to capital market regulator Sebi for violation of insider trading rules by the chairperson and appointment of the board of her choice.

Meanwhile, one of the Burman family firms Finmart Pvt Limited filed a case against the Registrar of Companies (RoC) and REL for delay in AGM for three months.

The court issued notice to the RoC and the company and granted 10 days to file a counter affidavit and five days thereafter for the Appellants to file rejoinder, according to a REL exchange filing.

The matter is now listed for hearing on October 21, 2024, it said.