InGovern raises concern as Religare Enterprises puts off AGM

InGovern, a proxy advisory firm, has raised concern over Religare Enterprises’ decision to postpone AGM to December without a clear rationale.

The postponement of Religare’s Annual General Meeting raises concerns around governance, shareholder rights, and the overall stability of the company. The decision has left shareholders feeling uneasy, prompting discussions about potential action they may take, it said.

‘Pending approvals’

The company cited “pending statutory/regulatory approvals in relation to the ongoing open offer and the potential impact on the company and its shareholding pattern as the reason for seeking approval for putting off annual meeting.

The decision has left shareholders frustrated, as the company has not provided a valid reason for the postponement, especially since the financial accounts were already filed with the exchanges, it said.

The postponement is particularly significant because Dr Rashmi Saluja, the Executive Chairperson, was due for reappointment, as she will retire by rotation, at the originally scheduled AGM in September.

As the only non-independent director, her position requires re-appointment at each AGM, making the timing of this delay critical, said InGovern.

In response to the report, Religare Enterprises spokesperson it seems that InGovern has no regard for the Courts/Tribunals and Investigating Agencies of the country. It not only suppresses material information that the matters being commented upon are ‘sub-judice’, but also goes on to give its final verdict to influence the securities market.

“What would have been prudent as an ethical practice from an analyst firm would have been to validate the information before publishing, by interacting with the leadership at REL for a ‘true and fair’ view of the situation at hand,” he said.

The current report seems biased, motivated and at the same time an attempt to tarnish the image of REL’s present Board and Management, he added.

“The analyst firm also does not take any responsibility for the completeness, accuracy or utility of their own analysis. This at large is not only misleading but also derogatory in nature, affecting the credibility of REL as an organisation, and the leadership,” he said.

Transparency in question

Institutional shareholders have expressed their discontent, suggesting that the delay appears to be a strategy to avoid a vote on Dr Saluja’s reappointment.

The postponement may indicate underlying issues, such as governance disputes or unresolved strategic decisions. Legal experts have noted that such delays can signal problems in the company, potentially affecting shareholder confidence and regulatory scrutiny.

The delay comes amid heightened tensions between the existing management and the Burman family, who are seeking a controlling stake in Religare. This conflict has further complicated the governance landscape and may have influenced the decision to postpone the AGM, it said.

As the battle between the Burman family and the current management intensifies, InGovern said SEBI has the authority to examine the decision-making processes that led to the delay, and the company’s actions regarding share allotments and Employee Stock Ownership Plans.

As Religare navigates this precarious situation, the implications of failing to hold the AGM as scheduled could reverberate throughout the organisation. The company must prioritise compliance to avoid the legal pitfalls that could jeopardise its operations and shareholder trust.

Religare’s response

In response to the report, Religare Enterprises spokesperson said that InGovern has no regard for the courts/tribunals and investigating agencies of the country. It not only suppresses material information, comments on matters that upon sub-judice, but also goes on to give its final verdict to influence the securities market.

“A prudent and ethical practice from an analyst firm would have been to validate the information before publishing, by interacting with the leadership at REL for a true and fair view of the situation at hand,” he said.

The current report seems biased, motivated and, at the same time, an attempt to tarnish the image of REL’s present Board and Management, he added.

“The analyst firm also does not take any responsibility for the completeness, accuracy or utility of their own analysis. This at large is not only misleading but also derogatory in nature, affecting the credibility of REL as an organisation, and the leadership,” he said.