SAT orders Religare to apply with Sebi for open offer by Burmans
Religare Enterprises directed by SAT to apply for Burman family's open offer to increase stake. Sebi's show cause notice stayed temporarily. Dispute arises over open offer price and 'fit and proper' allegations. Court battles and accusations of fraud escalate between Religare and the Burmans.
The () on Wednesday directed (REL) to apply with the Securities and Exchange Board of India (Sebi) for the made by the family to raise its in the company. The tribunal, which hears appeals against the orders, however, stayed the show cause notice issued by the capital markets regulator to the financial services company and its board.In June, Sebi had asked to apply with it the open offer proposal by the Burman family to purchase an additional 26% stake from the firm's public . approached SAT against the Sebi directive.
SAT has asked Religare to make the application with Sebi by July 22.
In response to the SAT order, a Religare spokesperson said, "REL shall make necessary applications to regulators without prejudice to prosecuting the appeal. Sebi has been granted one month to file its reply and a rejoinder be filed within the next one month. The matter is now fixed for further hearing on August 26, 2024."
The did not respond to an email query until press time.
The Burman family, the largest shareholder of Religare holding around 25% stake in the company, had announced the open offer in September 2023 to increase the family's stake and take control of the firm. But Religare did not file the open offer application with Sebi citing a low open offer price and 'fit and proper' allegations against the Burmans.
In its show cause notice, Sebi had asked REL chairperson Rashmi Saluja and the management why "suitable directions" must not be passed against them for non-co-operation in the open offer by the Burmans.
Religare's management led by Saluja and the Burmans, promoter of FMCG major , are at loggerheads over the latter's open offer plans. The Burmans have accused the Religare leadership of corporate governance lapses. Religare has accused the Burmans of fraud and other wrongdoing.
The Burmans first invested in Religare by subscribing to share warrants, representing a stake of about 10%. The warrants were subsequently converted into equity. Thereafter, they increased their stake in Religare to about 22% and later announced to acquire 5% of the company's shares from the secondary market, triggering an open offer for an additional 26%.
In May, Religare moved the Delhi High Court against Sebi for its alleged inaction on the complaints made against the Burman family. The firm asked the court to direct Sebi to conduct a forensic audit of the actions taken by the regulator on the basis of its complaints.
Source: Stocks-Markets-Economic Times
