SAT directs Religare to comply with Sebi directions on Burman open offer

Told to file application with RBI, Irdai by July 22 along with concerns on 'fit & proper' status of Burmans

The Securities Appellate Tribunal (SAT) on Wednesday directed Religare Enterprises (REL) to submit the Burman family’s open offer application with financial regulators and comply with regulations for statutory approvals.

In an interim order-cum-show-cause notice issued on June 19, the Securities and Exchange Board of India (Sebi) had asked REL to apply for approvals before July 12 to proceed with the open offer made by the Burman family.

The order also questioned chairperson Rashmi Saluja and the REL management as to why action should not be taken against them for non-co-operation in the open offer by the Burman group.

REL moved the tribunal seeking relief from Sebi’s order.

The counsel — arguing for REL — submitted to the court that it will file the application along with concerns on the ‘fit and proper’ criteria for the Burman family to the regulators by July 22.

According to the SAT directive, REL needs to apply for approvals to the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority of India (Irdai).

The tribunal has put an interim stay on the show-cause issued to REL chairperson Saluja and five other directors. It provided interim relief from any further action by the regulator until the next hearing, which could be in August.

Shares of REL fell over 2 per cent to close at Rs 238.25 apiece.

Entities-owned by the Burman family held a 21.54 per cent stake in REL.

Four entities purchased an additional 5.27 per cent stake in September 2023 in the open market, following which they made a public announcement to launch an open offer to acquire an additional 26 per cent.

Currently, the Burman family is the single-largest shareholder in REL but has no board representation.

Starting October 2023, REL board made several representations to Sebi against Burman’s move to acquire more shares.

This was on the ground that they don’t meet the ‘fit and proper’ criteria to become a promoter of a financial company with key licences for insurance, lending and broking business.

Meanwhile, Burmans’ also moved Sebi complaining about the “complete absence of cooperation and support from REL.”

This they said had hindered their efforts to furnish necessary information for obtaining regulatory approval and complete the open offer process.

According to regulatory sources, Saluja was also under probe for alleged insider trading before the announcement of the proposed acquisition.