Both Religare resolutions defeated by shareholders amid public spat

Religare Enterprises faced dissent from shareholders with both of its resolutions failing to obtain requisite votes.

The NBFC had floated two special resolutions, one for seeking an approval to invest up to Rs 15 crore in MIC Insurance Web Aggregator, and the other to amend articles of association (AoA).

The first resolution got nearly 74 per cent against vote, while the second one got 32 per cent against vote. As both resolutions were “special” they required at least 75 per cent voting in favour.

In a stock exchange filing, Religare said both resolutions have “failed to pass with requisite majority as per Section 114(2) of the Act.”

The dissent from shareholders comes amid a public spat between the board and the Burman family. In September 2023, the promoters of Dabur had made an offer to hike their stake in Religare by acquiring an additional stake for Rs 2,116 crore at Rs 235 per share.

Conflict had broken out between Religare’s board and the Burman family following their plan to augment their stake in the NBFC.

While most voting advisory firms had recommended ‘for’ votes on the second resolutions, they seemed divided on the first. While Institutional Investor Advisory Services (IiAS) and Stakeholder Empowerment Services (SES) had recommended shareholders to vote in favour of the proposal to infuse funds into MIC, a wholly-owned subsidiary of Religare, InGovern had opposed it.

Religare had said with MIC’s acquisition, the company intends to grow the business of insurance web aggregation and expand MIC as a profitable business.

The second resolutions pertained to deletion of certain provisions in the shareholders agreement entered between Religare and International Finance Corporation, which is no longer a shareholder in the company. 

Despite proxy advisory firms ‘for’ recommendations, failing to garner adequate support on both resolutions becomes a potential setback for Rashmi Saluja-led management of Religare. Shares of Religare on Friday closed at Rs 219, up 1.84 per cent over its previous day’s close.