Religare Crisis Escalates as Shareholders Vote to Remove Chair Rashmi Saluja

The crisis at financial services firm Religare Enterprises Ltd appears to have deepened further after its much-awaited annual general meeting (AGM) on Friday.  The firm's stock exchange filing on the AGM shows that shareholders overwhelmingly voted on a resolution before the meeting to block the reappointment of Religare Chairperson Rashmi Saluja as a director. Meanwhile, during the AGM, Saluja claimed that her tenure would not end in the annual rotation. 

In the run-up to the AGM, more than 97% of Religare shareholders voted against the resolution for Saluja’s reappointment. 

As per the AGM proceedings summary, Saluja blocked further voting on the resolution. She told shareholders, "I don’t offer myself for re-appointment as I am not liable to retire by rotation." 

Rashmi Saluja had earlier approached the Delhi High Court to block the company’s AGM proceedings, arguing that her reappointment as a director would violate her contractual tenure as Chairperson, which runs until 2028. However, the court denied her request. Saluja had also filed a plea seeking a permanent injunction to prevent her removal and stop the resolution from being voted on at the AGM. 

As per the AGM scrutinizer’s report, about three-fifths of Religare shareholders had already voted on the resolution through electronic voting. 

"The Resolution No. 2 (Ordinary Resolution) failed to pass with the requisite majority," said scrutinizer MAKS & CO. 

What’s Next for Religare?

Now, the financial services firm's board, which includes P.K. Tripathi, Malay Sinha, Ranjan Dwivedi, and Preeti Madan as independent directors, will be required to appoint a new chairperson. Earlier this month, Hamid Ahmed resigned as an independent director of the company. 

During the AGM, P.K. Tripathi noted the case filed by Chairperson Saluja and stated that the Board of Directors had also hired a legal team to defend themselves. 

He also said that "the right of the stakeholders to exercise their vote on the agenda cannot be taken away." 

"The right of the stakeholders to vote on an agenda that had already been approved cannot be amended today by a statement that I am not liable for retirement by rotation because the Court has upheld that the liability is there under Section 152," he added.

Meanwhile, Religare's takeover battle is also escalating between Dabur promoter Burman Family and US-based investor Digvijay Gaekwad. The Supreme Court has directed Gaekwad to deposit Rs 600 crore in an escrow account by February 12 to prove the credibility of his counteroffer against the Burman family's open offer for the firm. 

The Burman family, Religare's largest shareholder, made an open offer to acquire an additional 26% stake in the financial services firm in 2023. Saluja and the company's board initially supported the takeover but later rejected the offer, stating that it undervalued the company. 

While the Burman family's open offer of Rs 235 per share remains pending, US-based investor Gaekwad has proposed a competing offer of Rs 275 per share. However, Gaekwad's bid has been rejected by the Securities and Exchange Board of India (Sebi) for being too late. 

Digvijay Gaekwad has now sought a meeting with Prime Minister Narendra Modi during his visit to the US to request an “open and fair” opportunity to acquire Religare Enterprises.