SEBI Concludes Investigation into Religare Enterprises and Rashmi Saluja
The Securities and Exchange Board of India (SEBI) has formally concluded its proceedings against Religare Enterprises Limited (REL), its former Executive Chairperson Rashmi Saluja, and five directors. The case involved allegations of non-cooperation with the Burman Group’s open offer for REL. The closure comes following SEBI’s interim order-cum-show cause notice issued on June 19, 2024, which has now been disposed of without any additional directives.
Resolution of Underlying Issues
SEBI’s decision to close the case was significantly influenced by the completion of the open offer and the subsequent assumption of control by the Burman Group over REL. SEBI’s order dated July 31 stated, “Consequently, where the alleged irregularity has already been cured and the corrective steps have been fully implemented, the very object of a remedial direction stands satisfied.” This resolution effectively addresses the primary concerns that initiated the proceedings.
Background of the Case
The proceedings targeted REL along with directors Malay Kumar Sinha, Hamid Ahmed, Praveen Kumar Tripathi, Ranjan Dwivedi, and Preeti Madan. The initial dispute emerged when MB Finmart Private Limited, Puran Associates Private Limited, VIC Enterprises Private Limited, and Milky Investment & Trading Company, collectively known as the Burman Group, declared an open offer for REL in September 2023. The Burman Group, which held a 21.54% stake in REL, intended to acquire an additional 26% at ₹235 per share, cumulatively amounting to approximately ₹2,116 crore.
REL’s Objections and SEBI’s Directives
Between October 2023 and June 2024, REL raised multiple objections with SEBI against the proposed open offer, citing concerns about the acquirers. In response, the Burman Group lodged a complaint with SEBI regarding REL’s alleged lack of cooperation. SEBI directed REL to solicit regulatory approvals from the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (IRDAI), and SEBI to advance the offer. However, REL contested SEBI’s jurisdiction and questioned the Burman entities’ credentials as “fit and proper” persons.
Interim Order and Independent Directors’ Allegations
SEBI’s interim order cited potential breaches of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations and the Listing Obligations and Disclosure Requirements Regulations. It required REL and its directors to provide an undertaking for obtaining necessary regulatory approvals, ensure compliance with takeover regulations, and establish a committee of independent directors.
During the proceedings, four independent directors alleged that Saluja had misled them and dominated the REL board. Saluja refuted these claims, asserting that the independent directors operated autonomously with legal counsel. SEBI opted not to adjudicate these disputes, indicating that the personal motives ascribed to Saluja were beyond the scope of the current proceedings.
Completion of the Open Offer
The open offer was concluded on February 13, 2025, followed by the issuance of a post-offer advertisement on February 18, 2025. The Burman Group was reclassified as REL’s promoters. Citing precedents from the Securities Appellate Tribunal (SAT), SEBI emphasized that its directives under Sections 11 and 11B of the SEBI Act are primarily preventive and remedial. With all directives from the interim order addressed and the open offer finalized, SEBI saw no need for further action.
