InGovern red flags Religare-MIC deal
The corporate governance tracker questioned the rationale behind the deal, citing a lack of adequate disclosures and the absence of correlation with Religare's core business.
Mumbai: Proxy advisory firm Research Services has recommended that shareholders of (REL) vote against a resolution proposing an in MIC Investment Web Aggregator.The corporate governance tracker questioned the rationale behind the deal, citing a lack of adequate disclosures and the absence of correlation with Religare's core .
The New Delhi-based financial services company has sought shareholder approval to invest up to ₹15 crore in MIC, an insurance web aggregator. InGovern has highlighted that Religare is currently experiencing an "uncertain phase" and facing a regulatory probe. InGovern suggests that the proposed investment should be deferred at this juncture.
The proxy alleged numerous concerns regarding the proposed resolution. According to InGovern, REL has not disclosed financial details or the valuation of MIC. Furthermore, information regarding MIC's funding requirements and its current debt-service records remain unavailable.
In response to an ET query, a company spokesperson said the group's business is required to be conducted on a going-concern basis, given the pending open offer.
"REL has already acquired MIC in December 2023, under an agreement executed in April 2023 (before the Open Offer). With MIC's acquisition, REL intends to grow the business of insurance web aggregation and expand MIC as a profitable business. Accordingly, the resolution has been put forward to shareholders," said the company spokesperson.
The firm said the proposed investment is a "misallocation of capital" and that the proposed acquisition does not align with Religare's overall business strategy.
Source: Stocks-Markets-Economic Times
