Religare Enterprises Rejects Burman Familys ESOP Claims

New Delhi, January 3: Religare Enterprises Ltd (REL) has strongly refuted the allegations made by the Burman family regarding the allotment of 8 per cent stake in Religare Finvest Ltd (RFL) to its Chairman, Rashmi Saluja, through Employee Stock Ownership Plans (ESOPs). The company asserts that the approval sought at the Annual General Meeting (AGM) of RFL held on September 26, 2023, was solely to obtain enabling approval from shareholders for the proposed grant of ESOPs to Saluja under the RFL ESOP Plan 2019.

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Approval Sought at AGM

REL clarified that the purpose of the AGM was to seek shareholder approval for the grant of 2,14,11,555 options under the RFL ESOP Plan 2019 to Saluja, which is equivalent to or exceeds 1 per cent of the current issued share capital of RFL. However, subsequent to the passing of the enabling special resolution by the shareholders, RFL has not submitted any proposal to the National Stock Exchange (NSE) for the grant of the aforementioned ESOPs to Saluja.

No Contravention of SEBI Regulations

REL emphasized that since no new shares were issued or allotted in this matter, there is no contravention of Regulation 26(6) of the SEBI Takeover Regulations. The company maintains that it upholds the highest standards of corporate governance and compliance in all transactions and stands firmly behind its management.

Burman Family's Concerns

Earlier in the day, the Burman family, which collectively owns 21.24 per cent of REL through its entities, raised concerns about the alleged allotment of 8 per cent of RFL shares to Saluja through ESOPs. They questioned the compliance with SEBI Takeover Regulations and expressed doubts about the management and independence of the independent directors of REL.

Open Offer and Shareholder Trust

The Burman family, the promoters of Dabur India and other entities, had announced an open offer in September 2023 to 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.

REL Board's Response

When contacted, REL asserted that its board upholds the highest standards of corporate governance and compliance in all transactions. The company dismissed the allegations and expressed confidence in its management.

ESOP Shares Valued at Rs 250 Crore

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 Burman family, which has invested around Rs 900 crore to Rs 1,000 crore in the financial service provider.

Earlier Concerns and Regulatory Approach

Prior to this, the Burman family 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 intervention from SEBI.

The ongoing dispute between the Religare board and the Burman family highlights the importance of transparency and accountability in corporate governance. As the situation unfolds, it remains to be seen how the matter will be resolved and whether further regulatory action will be taken.