ED summons Dabur's Mohit Burman, others in Religare money laundering probe

Religare open offer case: Dabur Chairman Mohit Burman, three independent directors of Care Health Insurance and the manager of the open offer have been summoned by the Enforcement Directorate

The Enforcement Directorate (ED) has summoned Mohit Burman, Chairman of Dabur India, along with three independent directors of Care Health Insurance and the manager of the open offer, in connection with an alleged money laundering investigation related to the Burman family's open offer to the shareholders of Religare Enterprises (REL), according to a report by The Economic Times.

The investigation is linked to allegations of funds syphoned from Religare Finvest, a non-banking financial company (NBFC) under the Religare Group, being funnelled into companies connected to the open offer.

Burman family and Religare investigation

The probe, initiated after a complaint by REL shareholder Vaibhav Gawli, accuses the Burman family of making false claims and misrepresentations in their open offer to REL shareholders, thereby manipulating them into tendering their shares. The complaint alleges that the risks associated with the offer were not fully disclosed, leading to financial losses for shareholders like Gawli, who purchased shares after the offer was announced.

 

While most of those summoned by the ED sent representatives instead of appearing in person, the investigation aims to collect statements to evaluate the validity of the money laundering allegations.

The Economic Offences Wing (EOW) of the city police is also investigating the case but has yet to summon any of the accused.

Religare-Burman tussle and regulatory scrutiny

This marks the first time a probe agency has summoned all stakeholders involved in the Religare-Burman dispute. The ED has already recorded Gawli’s statement, which aligns with his earlier complaint to the Mumbai police. The investigation's outcome could hinge on clarifications from the Securities and Exchange Board of India (Sebi) and other regulatory bodies.

The Burman family has expressed confidence that the investigation will reveal the correct facts. The Burmans stated that the open offer price was set at Rs 235, a premium over the calculated price of Rs 221 based on Sebi’s takeover regulations, the report mentioned. 

Involvement of Care Health Insurance

Earlier this month, three non-executive, independent directors of Care Health Insurance, including SL Mohan, Asha Nair, and Hamid Ahmed, were among those summoned by the ED.

The investigation also encompasses the company's issuance of employee stock ownership plans (Esops) to REL Executive Chairperson Rashmi Saluja, which have been scrutinised by the Insurance Regulatory and Development Authority of India (Irdai).
 

The Securities Appellate Tribunal (SAT) on Friday stayed an Irdai order penalising Care Health for issuing stock options to Saluja despite regulatory prohibitions. However, SAT has restricted Saluja from exercising or diluting her shares until a final decision is made.

The ongoing investigation and legal proceedings involve various allegations and counter-allegations, with regulatory bodies like Sebi and Irdai playing a crucial role in determining the case’s outcome.