RFL stake to Rashmi Saluja kicks up a row

The ESOP shares in question are valued at approximately Rs. 250 crore and have become a point of contention between the Religare board led by Saluja and the Burmans family, which has invested around Rs. 900 crore to Rs. 1,000 crore in the financial service provider

The Burman family, which collectively owns 21.24 per cent of Religare Finvest Limited (RFL) through its entities, has raised concerns about the alleged allotment of eight per cent of RFL shares to Rashmi Saluja, chairperson of Religare Enterprises Limited (REL), through ESOPs, according to media reports.

They questioned the compliance with the SEBI Takeover Regulations and expressed doubts about the management and independence of the independent directors of REL.

The Burman family, promoters of Dabur India and other entities, had announced an open offer last September acquire up to 26 per cent stake in REL for Rs. 2,116 crore. They expressed disappointment that a single executive had received a significant amount of remuneration through ESOPs at REL, Care Health Insurance Limited, and RFL without proper approval and disclosure to REL shareholders, Good Returns reported.

The ESOP shares in question are valued at approximately Rs. 250 crore and have become a point of contention between the Religare board led by Saluja and the Burmans family, which has invested around Rs. 900 crore to Rs. 1,000 crore in the financial service provider.

Prior to this, the Burmans had approached market regulator SEBI to investigate the sale of shares by Saluja after the announcement of the open offer. Additionally, some independent directors from Religare had also raised concerns over the open offer from the Burmans and sought the intervention of SEBI, it has been reported.

The approval sought at the AGM of RFL held on September 26, 2023 was to seek enabling approval of the shareholders for the proposed grant of ESOPs of RFL to Saluja under the RFL ESOP Plan 2019.

The notice for the aforesaid AGM was issued on September 1, 2023 and was accordingly submitted to the BSE by RFL, as per a statement issued by Religare Enterprises Limited.

Under the Companies Act, 2013 and the SEBI ESOP Guidelines, the approval of shareholders of a company by way of separate resolutions is required in case of grant of options to identified employees, during any one year, equal to or exceeding 1 per cent of the issued capital of the company at the time of grant.

“We request you to kindly note that the AGM of RFL was convened on September 26, 2023 and the shareholders of RFL, among 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 the CMD, equivalent or exceeding to 1 per cent of the current issued share capital of RFL," Religare Enterprises said.

The explanatory statement of item No. 5 of the said AGM notice also states that once all the requisite approvals are in place, NRC can accordingly grant the ESOP to the CMD.

Subsequent to the passing of enabling special resolution by the shareholders of RFL w.r.t. item No. 5, RFL has not placed any proposal with the NRC till date for grant of abovementioned ESOPs to CMD.

Since no new shares were issued or allotted in the matter, there is no contravention of the Reg 26 (6) of the SEBI Takeover Regulations, the statement said.

A statement by the Board of Directors of Religare Enterprises said, “The Board of Directors endorses the statement of REL and reiterates that it upholds high standards of corporate governance and compliances."