Proxy advisors oppose Rashmi Saluja's reappointment at Religare Enterprises

Three leading proxy firms have recommended an ‘against’ vote on a resolution pertaining to the reappointment of Rashmi Saluja as director on the board of Religare Enterprises (REL), citing corporate governance concerns.

 

Stakeholders Empowerment Services (SES), Institutional Investor Advisory Services (IiAS), and InGovern Research have issued voting recommendations on the three resolutions floated by the financial services firm.

 

Voting will begin from Tuesday and results are expected after the annual general meeting (AGM) scheduled for Friday.

 

Fifty-year-old Saluja is liable to retire by rotation unless reappointed again at the upcoming AGM, which was originally slated for December.

 

 

It was delayed due to legal proceedings before the Madhya Pradesh High Court (HC). It was later dismissed.

 

Saluja has also filed a plea in Delhi HC against the resolution, contending that her appointment in 2023 was for a fixed period of five years.

 

The plea, which four independent directors and the Burman family have objected to, is scheduled to be heard this week in the HC.

 

“She is a member of the Audit Committee (AC) and the Nomination and Remuneration Committee (NRC), raising concerns over potential conflicts of interest,” said IiAS. 

 

The advisory firm added that various legal disputes and police cases may be potential distractions to the board and Saluja’s ability to execute her responsibilities as the executive chairperson.

 

“We believe the ill-advised grant of ESOPs and the current misalignment with the largest shareholder remain a cause for concern. We do not support the resolution,” the note by IiAS added.

 

Citing the regulatory scrutiny, legal challenges, and creditworthy issues, InGovern has also recommended against the reappointment.

 

“The ongoing scrutiny of Religare raises questions about the effectiveness of governance under her leadership which reflects poorly on her oversight and governance capabilities. There are also concerns about her compensation practices and adherence to regulatory guidelines regarding executive remuneration,” said InGovern.

 

InGovern said that high executive remunerations paid by the company, compared to peers with similar market valuations, raises concerns on governance and impacts the company's reputation negatively.

 

Meanwhile, these two proxy advisory firms are in “favour” of two other resolutions, which includes adoption of the standalone financial statements and appointment of statutory auditor.

 

SES has also an ‘against’ vote on resolutions around adoption of financial statements, citing concerns that financials of certain subsidiaries are not disclosed on the website. 

 

On Saluja, other than the compensation and regulatory orders, SES has also cited disproportionate and excessive ESOPs at the company and group levels as a concern. 

Refuting the concerns raised by the proxy advisory firms, REL said that the reports were 'orchestrated and motivated'. The company has also questioned the timing of the reports by the advisory firms.

 

 "We strongly condemn attempts to disseminate false information and create prejudicial narratives through unsubstantiated reports. The matters regarding compensation practices and ESOPs are currently sub-judice, and as such, any attempt to influence public opinion through misleading analysis is not only unethical but also shows complete disregard for ongoing legal proceedings," said the company. 

US entrepreneur files fresh plea with Sebi for competing offer

 

Religare Enterprises on Monday disclosed that US entrepreneur Danny Gaekwad has filed a fresh application with Sebi seeking exemption from strict enforcement of takeover regulations, enabling his “competing offer”.

 

He has appointed domestic investment bank PL Capital Markets to handle the share purchase.

 

Gaekwad’s earlier plea was returned by Sebi.

 

The Florida-based entrepreneur has proposed a counter offer for 55 per cent stake in REL at an offer price of Rs 275 — a 17 per cent premium to that of Rs 235 per share offered by the Dabur promoters, the Burman family. Burman’s open offer is currently underway.

 

“We confirm that we are ready and willing to submit a genuine competing offer for the shares of REL to the public shareholders under Regulation 20 of the Substantial Acquisition of Shares and Takeovers (SAST) Regulations at a price of Rs 275 per equity share of REL in accordance with the SAST Regulations.

 

We request you to kindly allow us to make a public announcement of our competing offer in the larger interest of the public shareholders of REL,” stated the application by Gaekwad. 

Shares of REL declined 0.25 per cent to end at Rs 237.90 on the BSE on Monday.