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19 Nov 2024
The Securities Appellate Tribunal (SAT) has extended the deadline for Religare Enterprises Ltd to comply with the Securities and Exchange Board of India's (SEBI) order until 22 July. This order, issued on 19 June, required Religare to seek approval from regulatory authorities, including the RBI, for the Burman Family's open offer by 12 July.
Religare had contested SEBI’s order, which also demanded an explanation from Religare, its chairperson Rashmi Saluja, and five others on why they should not be barred from participating in capital market activities.
A senior counsel involved in the matter stated, “SAT has stayed the show cause notice. We requested time to apply until 22 July without prejudice to all our rights and contentions.” Before September 2023, the Burmans held a 21.54% stake in Religare Enterprises. On 25 September 2023, under SEBI’s Substantial Acquisition of Shares and Takeovers Regulations, the Burmans announced their intention to increase their stake by 5.27%, triggering an open offer.
A bench led by Justice Dinesh Kumar has directed SEBI to respond within four weeks, scheduling the next hearing for 26 August.
The Burmans proposed an open offer to purchase 9 crore shares, representing a 26% stake at ₹235 per share, totaling ₹2,115 crore. Since then, disputes have arisen between the Burmans and Saluja over the acquisition. The Burmans accused Saluja of obstructing the open offer, which she denied, arguing that the Burman family was not ‘fit and proper’ for the acquisition.
Senior counsel Ravi Kadam, representing Religare, requested time to apply to regulators until 22 July without prejudice to their rights and contentions. He argued that the Burmans were allegedly involved in the Mahadev betting scam, rendering them unfit for the acquisition. Religare has also sought the Delhi High Court’s direction for SEBI to investigate the Burman Group, with a hearing scheduled for 20 August.
In November 2023, Mumbai police reportedly booked 32 individuals, including Dabur group director Gaurav Burman and chairman Mohit Burman, in connection with a betting scam. SEBI's counsel argued that the company has no right to obstruct the acquisition, as this decision rests with the shareholders.
The acquisition was finalized in January when the Burmans officially acquired a 25.18% stake in Religare Enterprises. Last year, Religare objected to the open offer, citing the Burmans’ unfitness for acquisition. SEBI requested documentation supporting these claims and subsequently directed Religare to apply to the relevant regulators within 15 days. SEBI clarified that the 'fit and proper' allegations against the Burmans would be addressed separately by each regulator after the applications were submitted.
Religare criticized SEBI’s directive to apply to RBI, IRDAI, and SEBI, calling it an overreach and a clash with the powers of Religare's Board of Directors. The Burmans had complained to SEBI about Religare's lack of cooperation, which hindered their efforts to obtain regulatory approval and complete the open offer process.
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