A war of words has broken out between the Burman family of Dabur and the board of Religare Enterprises regarding the open offer made by the Burman family for the company. This comes after the Reserve Bank of India (RBI) rejected the application made by the Burmans for a change of control of the company.
“With reference to the application dated November 30, 2023, submitted through counsel TT&A (Talwar Thakore & Associates), it is conveyed that the request cannot be acceded to. The application for prior permission for acquiring control and/or a change in management has to be submitted by the non-banking financial company in which a change in management and control is taking place,” the RBI informed the Religare board on February 5.
A spokesperson for the Burman family said on Monday that the banking regulator has taken note of the non-cooperation by Religare and has directed Religare to make the necessary applications to the banking regulator.
“This situation once again highlights the partisan approach the board of Religare has taken, resulting in a delay in the completion of the open offer at the cost of public shareholders. Hopefully, with these directions, the board of Religare Enterprises will retain its independence and fulfil its fiduciary duty by applying to the RBI,” said a spokesperson for the Burman family.
“This is absolutely false. The RBI has never asked the Religare board to file any application or written any such letter to us," said a spokesperson for Religare.
The Religare Enterprises board has rebelled against the open offer of Rs 235 a share by the Burman family in September last year, stating that the company is undervalued by the Burmans. The board believes the company is valued at least Rs 300 a share, and minority shareholders are not getting a fair deal. The directors have complained to the market regulator, the Securities and Exchange Board of India (Sebi), against the open offer. The open offer is currently pending with Sebi as it awaits clearance from the RBI and the Insurance Regulatory and Development Authority of India.