MP High Court stays Religare's AGM and open offer by Burman family

Court also stayed Religare Enterprises annual general body meeting

In a strange turn of events, the Madhya Pradesh High Court’s Jabalpur Bench has stayed the Burman family’s open offer to acquire an additional 26 per cent stake in Religare Enterprises, and the company’s annual general body meeting.

 

The order passed on December 18 came in response to a petition seeking an independent commission of enquiry to monitor the acquisition by the Dabur promoters. Religare informed exchanges about the order on Thursday.

 

The stay order will continue till further directions by the court. The latest disclosure comes close on the heels of conditional approval from the Reserve Bank of India (RBI) for the open offer. Sources indicate that the market regulator Securities and Exchange Board of India’s (Sebi’s) nod for the open offer is also finalised.

 

 

Experts said the petition in the High Court could lead to further delay in the open offer and put the company’s public shareholders in a disadvantageous position.

 

The matter may be next listed for hearing in mid-January. The counsel for the petitioner has submitted to the court that if the acquisition is allowed, the control will go into the hands of 399 persons only, which will defeat the interest of 73,623 others.

 

The petitioner has sought the appointment of an independent commission of enquiry under the Commissions of Enquiry Act, 1952 to oversee and monitor the proposed acquisition to protect the interest of the public at large, including the minority shareholders.

 

The petition also seeks directions to constitute a special investigation team in the matter.

 

Four entities owned by the Burman family in September 2023 purchased an additional 5.27 per cent stake through the open market. This triggered an open offer as they already held a 21.54 per cent stake in the financial services firm. The Burman family had announced the open offer to acquire an additional 26 per cent.

 

Currently, the Burman family is the single-largest shareholder in Religare but has no board representation. Religare filed for the nod from regulators for the open offer in August this year, following directions by the Securities Appellate Tribunal (SAT).