Burmans seeks Sebi probe into allotment of ESOPs to REL chairperson

Burmans seeks Sebi probe into allotment of ESOPs to REL chairperson

The Burman family on January 3 sought an investigation, in compliance with Securities and Exchange Board of India (Sebi) guidelines, into allotment of nearly 21.4 million shares, constituting 8% stake in Religare Finvest, to Religare Enterprises (REL) Chairperson Rashmi Saluja through Employee Stock Ownership Plans (ESOPs). Religare Finvest is the non-banking finance company (NBFC) subsidiary of REL.

“It is unfortunate that a solitary executive has cornered significant quantum of remuneration through ESOPs at REL, Care Health Insurance Limited, and Religare Finvest (RFL), all without approval and requisite disclosure to REL shareholders,” a spokesperson of Burman family claimed.

“These actions have eroded trust and confidence in the REL’s board, necessitating urgent need to restore credibility,” the spokesperson added.

REL responded on the allegations saying its board upholds ‘highest standards’ of corporate governance and compliances in all transactions and stands by the company’s management.

The statement by the Board of Directors at REL said under the Companies Act, 2013 and based on the Sebi ESOP guidelines, 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, is equal to or exceeding 1% of the issued capital of the company at the time of grant.

“The approval sought at the AGM (annual general meeting) of Religare Finvest held on 26th Sep 2023 was to seek enabling approval of shareholders for the proposed grant of ESOPs of RFL to Rashmi Saluja under the RFL ESOP Plan 2019. The Notice of aforesaid AGM was issued on Sep 01, 2023 and submitted to the BSE accordingly by RFL,” the statement said.

The board pointed out that Saluja has not been granted any fresh shares of Religare Finvest post September 26. “Since no new shares were issued / allotted in the matter, there is no contravention of the Reg 26 (6) of the Sebi Takeover Regulations,” they added.

The tussle between Burman family and Saluja-led Board of Directors at Religare Enterprises began on September 25, after the former made an open offer to acquire additional 26% stake in Religare Enterprises at a price of Rs 235 per share. While Religare Enterprises believes that the price offered in the open offer was below market value, Burmans claim that the final value of shares were arrived, according to SEBI guidelines.

As of September 30, Burman family promoted four entities — Puran Associates, Vic Enterprises, MB Finmart and Mikly Investment & Trading Company—held 21% stake in Religare Enterprises, while Saluja held 1.4% stake in the company. Shares of REL 0.4% lower at Rs 214.20 a piece on the BSE today.