Religare Enterprises sends Burmans' open offer plea to Sebi, RBI

After dragging its feet for nearly a year, financial services company Religare Enterprises Limited (REL) has finally submitted the application for open offer by Dabur’s Burman family to the regulators, sources said on Tuesday.

As per the sources, REL has submitted the application to the Securities and Exchange Board of India (Sebi), Insurance Regulatory and Development Authority of India (Irdai), and the Reserve Bank of India (RBI).

The move follows directions passed last month by the Securities Appellate Tribunal and an order issued in June by Sebi against the management.

“REL has submitted its application for open offer. They had to comply with the tribunal’s order,” said a Sebi source.

As per an update on Sebi’s website, REL’s writ petition in the Delhi High Court in the matter is listed for hearing on August 20. The open offer may be processed after that as the matter is currently sub judice.

Email queries sent to the company and financial regulators did not elicit any response till the time of going to the press.

Earlier, REL had stated that it would file for the open offer with the regulators along with concerns on “fit and proper” status of acquirers Burman family.

The matter pertains to an additional 5.27 per cent open market stake purchase by four entities owned by the Burman family in September 2023, which triggered an obligation for open offer as they already held 21.54 per cent stake in REL. The Burman family had announced the open offer to acquire an additional 26 per cent.

At present, the Burman family is the single-largest shareholder in REL but has no board representation.

REL’s executive chairperson Rashmi Saluja has faced the ire of several regulators in the last few months.

In July, Irdai imposed a penalty of Rs 1 crore on REL subsidiary Care-Health Insurance, citing violations, and directed the insurer to buy back 7.66 million shares allotted to Saluja within a month. The insurance regulator had also disallowed the company from allotting ESOPs to Saluja as a non-executive director.

The market regulator is also probing allegations of insider trading levelled against Saluja, as per sources.

The Burmans had earlier moved Sebi, complaining about the “complete absence of cooperation and support from REL”, while the REL board in October 2023 made several representations to the market regulator against the Burmans’ move to acquire more shares.

This was on the ground that they don’t meet the “fit and proper” criteria to become a promoter of a financial company with key licences for insurance, lending and broking businesses.

The Sebi interim order-cum-show-cause notice had dealt with these allegations and called them “without any basis”.

Case file
 

 The move follows Sebi order issued in June against the management
 

 The open offer may be processed after August 20 as matter is sub judice
 

 Matter pertains to additional 5.27% stake purchase by four entities owned by Burman family in September 2023 in the open market
 

 At present, the Burman family is the single-largest shareholder in REL but has no board representation