SEBI directs Religare to seek approvals for Burman family's offer
The Securities and Exchange Board of India (SEBI) has given instructions to Religare Enterprises Ltd (REL) and its Chairperson, Rashmi Saluja. They have been ordered to obtain necessary approvals for the Burman family's open offer, to acquire additional shares in the conglomerate. The market regulator has expressed dissatisfaction with the board's attempts to stall the open offer process. SEBI has asked the REL board to apply to the Reserve Bank of India (RBI) for necessary approvals within a week.
Seeking assurance from Religare
SEBI has also requested written assurances from the Religare board within a week that it will comply with the securities law. The Burman family, leaders of consumer goods company Dabur, already owns over 25% share in REL and needs to finalize an open offer as per India's securities regulations. However, Religare has resisted applying to three regulators for approval for the open offer, claiming that the Burmans are not "fit and proper" to take over the company.
SEBI responds to Religare's regulatory resistance
Religare had previously told SEBI that it believed the regulator had exceeded its brief, in asking the company's board to comply with its Substantial Acquisition of Shares and Takeovers (SAST) regulations. In response, SEBI issued a notice stating that Religare had violated provisions of Regulation 26 of SAST Regulations, 2011, and failed to adhere to underlying principles governing these regulations. The regulator also stated that Religare had incorrectly concluded that SEBI has no jurisdiction over the matter.
Emphasizing shareholder rights: SEBI
SEBI further noted in its notice that, "The Target Company cannot be allowed to impinge on the rights of the shareholders and their fate cannot be left hanging in balance." It added that since Religare refused to take appropriate steps for making applications to regulators for statutory approvals, SEBI had no other choice but to issue urgent directions to the company. According to SEBI regulations, the target company, in this case, Religare, has to apply for all necessary approvals.
Burman family's open offer and stake acquisition timeline
The Burman family launched the open offer for control of Religare on September 25, 2023. The family owns stocks in Religare Enterprises through Puran Associates, VIC Enterprises, MB Finmart, and Milky Investment and Trading Company. The family has raised its shareholding in Religare over five years after initially bagging a 9.9% stake in April 2018. They increased it to 14% in June 2021 and then acquired an additional 7.5% in August 2023.
