Burman Family's Path Clear for Religare Takeover? SEBI Blocks Gaekwad’s Offer, Saluja Ousted

The Delhi-based financial services firm Religare Enterprises Ltd is set to enter a new phase following the exit of Chairperson Rashmi Saluja. Saluja’s ouster is seen as a key step in resolving the year-and-a-half-long battle over control of the company, which has a presence in insurance, housing finance, and asset management. 

Saluja’s departure also ends the rift that had developed between her and the four-member company board. In a stock exchange filing on February 13, Religare Enterprises announced that Saluja "ceases to be the Director of the Company" following clarification from the Reserve Bank of India (RBI). 

Saluja had failed to secure reappointment at Religare’s annual general meeting (AGM) in February. Over 97% of shareholders voted against her reappointment as the only non-independent director on the board. 

However, Saluja contested the voting result, citing an RBI directive from December last year. She filed a petition in the Delhi High Court last week over her claims. While the court’s decision is still pending, the Religare board stated that RBI’s clarification has allowed them to proceed with her removal. 

New Religare Leadership 

The Delhi-based financial services firm has now appointed board member Praveen Kumar Tripathi as Chairperson, but only until June 30. After that, one of the remaining three board members—Malay Kumar Sinha, Ranjan Dwivedi, or Preeti Madan—will take over. 

Religare’s board has decided to implement a rotational system for the chairperson role until a permanent leader is chosen. 

Meanwhile, PK Tripathi told Mint that the firm’s day-to-day administration will be overseen by a new six-member executive committee, comprising members from Religare and its subsidiaries. 

Burman Family Open Offer Still in Limbo 

While Religare’s leadership sorts out its internal differences, the battle for its takeover continues in court. 

On February 12, a day before Saluja’s exit, the Supreme Court granted a five-day extension to US-based investor Digvijay "Danny" Gaekwad to submit Rs 600 crore for his offer to acquire a majority stake in Religare Enterprises. 

The court also allowed additional time for Dabur’s promoter, the Burman family, to proceed with their open offer for an additional stake in the company. The Burmans already own over 25% of Religare and have launched an open offer to acquire an additional 26%, as per SEBI regulations. 

Meanwhile, Danny Gaekwad had put forward a competing offer to buy a 26% stake in Religare Enterprises Ltd. However, his initial attempt was rejected by SEBI, which ruled that the Florida-based investor did not qualify for an exemption under Regulation 11 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. 

Today, the Securities and Exchange Board of India (SEBI) once again declined to grant Gaekwad an exemption to make an open offer for Religare, calling his attempt "seemingly frivolous." 

In its order, SEBI said that the Burman Group has already invested considerable effort, time, and resources in making an open offer and has secured all necessary regulatory approvals, including from RBI and SEBI. 

"Although the price offered by the applicant in the proposed competing open offer is Rs 275 per equity share—a premium of Rs 40 per share over the Burman Group’s offer—the applicant has failed to demonstrate his ability to meet the financial obligations required for making the competing open offer," SEBI’s order further noted.