Religare saga: Rashmi Saluja plans to stay on until open offer ends

Shareholders have right to remove/appoint directors, say lawyers

Rashmi Saluja, chairperson of Religare Enterprises, has no plans to resign from the company despite being voted out as a director during last week’s annual shareholders’ meeting.  According to a source familiar with the matter, Saluja intends to remain in her position until the ongoing open offer from the Burman family and the counter-offer from US-based investor Digvijay “Danny” Gaekwad are concluded.  Emails sent to Religare did not elicit any response, while Saluja did not comment.  Lawyers said the case is more complex than it appears. “Despite shareholders overwhelmingly opposing Saluja's reappointment, her tenure may persist until all legal avenues are exhausted. Notably, at the recent AGM, she did not offer herself to ‘retire by rotation,’ further complicating the situation. Ultimately, the length of her tenure will depend on the outcomes of ongoing legal proceedings and any decisive actions taken by the company’s board or shareholders,” said CS Anupriya Saxena, a partner at Mumbai-based law firm JMJA & Associates LLP.  Rohit Jain, managing partner at Singhania & Co, said as per the provisions of the Companies Act, if the director was appointed as rotational and if her term falls under the rotation (as per Section 152(6) of the Companies Act), then the shareholders have the right to approve or reject her appointment in the AGM. "In this case, she will have to vacate the office from the date of the AGM on which the resolution about the appointment was disapproved by the shareholders,” Jain said.  Meanwhile, Gaekwad has sought an "open and fair" opportunity to acquire Religare Enterprises. Gaekwad, who is a Republican, is also planning to involve the American government to help clear the way for the counter-offer, which is facing regulatory hurdles.  "I have no choice left but to place my case before American lawmakers to get fair and equitable treatment from the Indian authorities. I am going to raise these questions with Prime Minister Narendra Modi during his visit to the US this week. I will apprise him of how US investors are treated," Gaekwad said late Sunday evening from Florida. Gaekwad is seeking help from Florida Senator Rick Scott, US Secretary of State Marco Rubio, and former President Donald Trump to support his case.  Gaekwad said he is thankful to the Supreme Court of India for giving him an opportunity to make a counter-offer for the company and deposit Rs 600 crore to acquire Religare. "I am offering Rs 275 a share for Religare, while the other offer is Rs 235 a share. The regulator should have given me a fair opportunity, but I was made to litigate till the highest court of the land," Gaekwad said.  Last week, the Supreme Court granted time till February 12 to Gaekwad to deposit the money for the counter-offer and asked Sebi to take a call on Gaekwad’s counter-offer.  Gaekwad made the counter-offer for Religare Enterprises as he believes the company has huge potential. However, the market regulator, Sebi, had returned his offer letter. The Burmans made the open offer for Religare after acquiring a 25 per cent stake in the company. Saluja has opposed the Burman offer, stating that the company should get a far better value.