Fate of Religare's open offer is with the regulators: Rashmi Saluja

Saluja discusses the Ingovern report, the uncertainties surrounding the open offer, and the company's future

Religare Enterprises, currently undergoing a turnaround, recently made headlines following a report by proxy advisory firm Ingovern. The Burman family, which owns 21.5 per cent, has made an open offer. As the takeover battle intensifies, the Securities and Exchange Board of India (Sebi), sent notices to Rashmi Saluja, chair of Religare Enterprises, for alleged insider trading. And, the Enforcement Directorate (ED) has also started a probe. In a video interview with Dev Chatterjee and Khushboo Tiwari, Saluja discusses various issues. Edited excerpts:

How do you respond to Ingovern’s report on Religare?
 

The Ingovern report is completely devoid of facts. It is shadow boxing for someone else. The proxy advisory firm should take responsibility for the report but it has written a disclaimer saying some of the contents of the report may not be true and hence it does not take responsibility. It is creating an anti-India sentiment at a time when the Indian economy is at its cusp. It is asking questions about a company which has emerged from very difficult times and is trying to attack us when several global investors are showing interest. In fact, it (InGovern) is trying to be a super regulator by trying to direct the regulator what to do.

There was a delay in holding the company’s annual shareholders meeting. Do you think the annual general meeting (AGM) of shareholders will be held on schedule?
 

There is no personal reason to delay the AGM. Delay in the AGM was cleared by the registrar of the companies (RoC). We stand committed to our shareholders. My request to every shareholder is to be responsible and let the company navigate in a way where the future is secured. We are going to continue with the timeline set for the AGM.
 

What is the current status of the open offer by the Burman family?
 

The open offer has been characterised as a hostile takeover. Typically, such offers drive up the company's valuation, bringing in new capital and innovative ideas while strengthening the organisation's leadership. This ultimately equips the company to better serve its shareholders, providing a positive boost. An open offer should not undervalue the company. Initially, they (Burmans) praised and supported the management over the past six years, collaborating with the board. Now, however, they claim they want the company because of its potential and strengths. They simultaneously dismiss the very people who helped achieve that progress.
 

Have you received any communication from the Reserve Bank of India (RBI) on the open offer?
 

I can't ask the RBI about timelines and I can only facilitate if there are any queries and that is an ongoing process. The RBI is very responsible and process driven.The proposal is with the regulators.
 

What is the response from the regulators, especially about the issues raised by Religare independent directors about the Burmans not meeting the ‘fit and proper’ criteria?
 

There is a process to an open offer. There are many issues regarding the open offer, including some others like employee stock options (ESOPs). 
 

We are expected to create a committee of independent directors, which helps navigate through the open offer. The committee would directly write to the regulators. If there are any concerns by any stakeholder, he or she writes to the company, and the committee of independent directors, without its own opinion, passes it on to the regulators. 
 

The fiduciary responsibility of the board and the committee is to bring all facts to the light of the regulators. The company was asked to make an open offer application to the RBI and the Sebi. The RBI has a very regulated and stringent process and usually would check every full stop and comma. So, as of now, it is the RBI which is going through the processes.

What is your view on the company’s performance?
 

We are out of very difficult times unlike other companies like DHFL and IL&FS which could not make it. We turned 

around the company and  repaid banks ~9,500 crores and brought it back to track.