SC asks Danny Gaekwad to deposit Rs 600 crore for Religare counter offer

The Supreme Court on Friday extended the Burman family's open offer for an additional stake in financial services firm Religare Enterprises to February 12.

 

It asked US-based investor Danny Gaekwad to deposit Rs 600 crore in terms of its competing offer against the Burman family's open offer on or before February 12. Failing this, the order will be set aside.

 

The public offer, which was to close on Friday, will continue till February 12.

 

In case Gaekwad deposits the amount on or before February 12, the Burman open offer will remain open until the Securities and Exchange Board of India (Sebi) decides on Gaekwad’s application for a counter offer, the court said.

 

Gaekwad had moved the apex court to challenge the open offer issued by the Burmans. He was contesting a Delhi High Court order that allowed the Burman open offer to proceed.

 

The Supreme Court said the Burman family's open offer for Religare Enterprises could proceed at their own risk.

 

The Bench said if the case is ultimately decided in favour of the Gaekwad family, the Burmans could face significant financial consequences.

 

The court also observed that the price offered in the open offer is based on September 2023 valuations and questioned the market regulator's role.

 

The court said Sebi should have exercised greater caution, as shareholders are now being asked to accept prices prevailing 18 months ago.

 

Religare share price closed 4.68 per cent higher at Rs 252.90 on Friday compared to Rs 235 a share offer made by the Burman family and Rs 275 a share counter offer made by Gaekwad.

 

The Burmans have made an offer for an additional 26 per cent stake under the Sebi takeover code after it acquired a 25 per cent stake in the company.

 

Meanwhile, the Gaekwad family told the Supreme Court that the Reserve Bank of India (RBI) had granted approval earlier, but the Sebi only cleared the offer in December 2024. They argued that the public offer was formally announced on January 18 this year, and they moved Sebi against it on January 22.

 

Solicitor General Tushar Mehta, appearing for the Sebi, informed the court that Gaekwad’s letter had been returned to him as it was non-compliant with the regulator’s procedure. He further submitted that Gaekwad’s follow-up application came on February 1 after Burman’s offer opened.

 

While the Supreme Court hearing was on, another drama was playing at the company’s annual shareholders meeting held online on Friday. Certain participants at the AGM alleged that the company’s executive chairperson Rashmi Saluja bypassed shareholder voting on the resolution of her re-appointment.

 

During the online AGM, Saluja “Did not allow live voting” on the agenda to appoint a new director in her place.

 

She claimed that she was not liable to retire by rotation, said people aware of the developments.

 

Sources said that an independent director present in the meeting openly contested Saluja’s decision but was dismissed by her.

 

“As per the second resolution, I do not offer myself for reappointment as I am not liable to retire by rotation,” said Saluja.

 

On the other hand, independent director Praveen Kumar Trivedi said, “The right of the stakeholders to vote on an agenda which had already been approved cannot be amended today by a statement that ‘I’m not liable to retire by rotation’ because the court has upheld that the liability is there. I only plead that the agenda that is approved is concluded where voting is to be done." 

 

Religare is yet to issue a statement on the matter. Email queries sent to the company on Friday remained unanswered till the time of going to press. Attempts to reach out to several independent directors did not yield any response.

 

“A large percentage of shareholders would have already e-voted in the past three days. The scrutinisers are duty bound to place the records of those who have already voted in front of the board and stock exchanges. The independent directors also have to be responsible and table the results for the shareholders. If the Board has no confidence in the chairperson, she can also be removed from the Board without much ado,” said Shriram Subramanian, founder of InGovern Research, a proxy advisory firm.