Religare Enterprises’ Board on Tuesday came in full support of its Chairperson Rashmi Saluja, asserting that SEBI Takeover Code has not been contravened in the Religare Finvest ESOPs matter.
It said that only an enabling resolution obtaining shareholders’ approval was passed at the Religare Finvest Ltd (RFL) AGM on September 26 and no ESOPs have, till date, been granted to Saluja.
The question of violation of Takeover Code does not arise, as no new shares were issued/allotted in the matter, REL Board has said.
“Subsequent to the passing of enabling special resolution by the shareholders of RFL, RFL has not placed any proposal with Nomination and Remuneration Committee (NRC) till date for Grant of ESOPs to CMD (Saluja). Since no new shares were issued / allotted in the matter, there is no contravention of the Reg 26 (6) of the SEBI Takeover Regulations,” REL Board said in a statement on Tuesday.
The approval sought at the AGM of RFL, held on September 26, 2023, was to seek enabling approval of shareholders for the proposed grant of ESOPs of RFL to Rashmi Saluja under the RFL ESOPs Plan 2019.
AGM notice
The Notice for this AGM was issued on September 1, 2023, and submitted to the BSE accordingly by RFL, said the REL Board.
At the centre of controversy is the 2.14-crore stock options of RFL constituting 8.17 per cent of the current issued capital. These options in the unlisted subsidiary are reportedly valued at ₹150-260 crore.
The earlier move of Care Health Insurance, another subsidiary of Religare Enterprises, to issue ESOPs to Saluja had also come under a controversy with proxy advisory firm InGovern Research raising several governance issues in the whole process.
The latest REL move backing Saluja came on a day when the Burman Family, which is in protracted battle with Religare Board, led by its Chairperson Rashmi Saluja, issued a statement, calling for investigation in the RFL ESOPs matter.
Burman Family contention
The contention of Burman Family is that the ESOPs issuance process was undertaken at the RFL AGM on September 26, a day after an open offer was announced by the Burmans to take additional 26 per cent stake and control of Religare Enterprises, which is the parent of RFL.
“The allotment of approximately 2.14 crore shares, constituting about 8 per cent of RFL, to Rashmi Saluja through Employee Stock Ownership Plans (ESOPs) requires investigation in terms of compliance with SEBI Takeover Regulations,” said a Burman Family spokesperson.
“It is unfortunate that a solitary executive has cornered significant quantum of remuneration through ESOPs at Religare Enterprises Ltd (REL), Care Health Insurance Ltd, and RFL, all without approval and requisite disclosure to REL shareholders”.
This raises question mark on the management and the independence of the independent directors and their complicity in such unjustified dole-outs, the Burman family spokesperson said.
REL Board should answer the shareholders whether there exist more instances of ESOP issuances to entities, and potential conflicts of interest. These actions have eroded trust and confidence in the REL board, necessitating urgent need to restore credibility, Burman family spokesperson added.