 "Delhi HC denies stay on the Religare AGM, Burman family open offer")
The Delhi High Court (HC) on Thursday declined interim relief to Sapna Govind Rao, a minority shareholder in Religare Enterprises (REL), who had sought a stay on the company’s upcoming Annual General Meeting (AGM) and the open offer made by Dabur promoter Burman family for a controlling stake in the financial services firm.
The HC observed that there was no valid competing offer at present before market regulator Securities and Exchange Board of India (Sebi) and ruled that the open offer by the Burmans could proceed without hindrance.
Sebi had returned the request by Florida-based businessman Danny Gaekwad for proposing a competing offer as it failed to meet the regulatory criteria under the securities laws.
Rao, who holds 500 shares of REL, had in her appeal stated that the undervaluation posed a significant threat to the interests of minority shareholders.
Further, on the plea to stay the AGM scheduled on February 7, the HC stated that the petitioner had not demonstrated compelling reasons to disrupt the company’s governance processes at this late stage. With no interim relief granted, the matter will next be heard on February 18.
The Burmans’ counsel argued that the plea was a “proxy litigation” to delay the AGM and prevent the change in REL’s management.
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A day earlier, REL’s Executive Chairperson Rashmi Saluja had approached the Delhi HC, seeking relief on her removal as a director from the financial services firm, contending that her appointment was valid till February 2028. The court will hear the matter on February 4, and has sought replies from other parties, including the Burmans.
Saluja now also faces contention from four of the six independent directors, who have objected to her plea.
In the AGM, REL is going to take up the resolution seeking the appointment of a director in place of Saluja, who is liable to retire by rotation. Saluja in her submissions had stated that her appointment was for a fixed tenure of five years and, therefore, there is no reason for the voting on appointment in the upcoming AGM.
Before this, the Jabalpur bench of the Madhya Pradesh HC had dismissed a similar plea where the petitioner had sought monitoring of the acquisition by the Burmans. The plea had led to a stay on the AGM for a short period but was later dismissed as the petitioner was not a shareholder in the company.
Rao’s counsel indicated in the court that Gaekwad would be filing a fresh exemption request under Regulation 11 for a counter offer.
The Burmans’ open offer opened on Monday and is scheduled to close on February 7. The board of REL will be meeting on February 3 to approve the financial results for the December quarter.
Shares of REL declined over 2 per cent to close at Rs 240 on Thursday.