Amidst the ongoing takeover tussle for Religare Enterprises Limited (REL), a key member of the Burman Family, Mohit Burman, said that he has confidence in obtaining all requisite regulatory approvals for the open offer even while noting that the ₹235 price offered was a ‘fair’ one and is at a premium to SEBI formula arrived price of ₹221. 

The open offer price is also now higher than the prevailing market price, he noted, implying that the Burman family is not looking to raise the price of ₹235 offered in the open offer. 

The pushback/resistance to the open offer from certain senior management at Religare (as opposed to the broader management /Board) is coming not because of the open offer price but due to the lapses in corporate governance highlighted by the Burman family, Burman told businessline. 

“There has to be a realisation that Religare is not a personal fiefdom of a few to fulfil individual objectives. The resistance to our open offer appears to be motivated by individual interests (who are concerned that their malpractices will now come to light) rather than any institutional opposition by Religare,” Burman said. 

Burman said that the trades done by REL Chairperson Rashmi Saluja -- where she sold REL shares worth about ₹34 crore on Sep 21 and 22 -- breached SEBI Insider Trading Regulations as she was in possession of unpublished price-sensitive information.

He also said that the Burman family representative communicated the family’s intention to make an open offer and assume control of REL with the REL Chairperson Rashmi Saluja at the Sept 20 meeting. “This was done to inform Rashmi Saluja in her professional capacity as the executive chairperson of the company”, Burman said. 

Rashmi Saluja had however recently categorically denied the fact that the representative of the Burman family informed her of the proposed open offer during the meeting. 

When asked about a perception in legal circles of the sale of ESOP-exercised shares not being covered under insider trading regulations, Burman said that this is a legal matter for SEBI to consider.

“However, in our understanding, there is only an exemption for the exercise of ESOPs but no general exemption for the sale of ESOP exercised shares. Therefore, it does not matter whether they were shares acquired through the exercise of ESOPs”, said Burman, who is also the Chairman of the FMCG company Dabur India. 

Burman family is now the single largest shareholder in REL (with a market cap of about ₹7,415 crore) and holds 21.54 per cent stake. It bought an additional stake of 5.27 per cent, triggering an open offer to purchase an additional 26 per cent from the shareholders of REL and offered a price of ₹235 per share. 

However, the Board of REL in its move to resist the open offer had reportedly claimed that the price was too low (REL was trading at ₹275 at the time of the offer). This was followed by independent directors of Religare filing allegations of fraud and other breaches against the Burmans with SEBI, IRDAI, and RBI.

Mohit Burman said that the baseless allegations and unscrupulous actions taken by certain senior management at Religare appear to be aimed at delaying such approvals. 

“This is unfortunate as such delays will not be in the interests of the Religare Group of companies as well as the minority shareholders who wish to exit through the open offer process”, he said. 

Mahadev app controversy

When asked about the Mahadev app controversy and the FIR naming Gaurav Burman and him, Mohit Burman said that the FIR development is shocking and baseless. “This is just a tactic to slander. The FIR is false and baseless and designed to defame the Burman family. We do not want to engage in any mudslinging but at the same time as we have said before—we will not get arm twisted”.

Mohit Burman said that shareholders support the open offer made by the Burman family which gives him the confidence that the open offer will proceed smoothly. 

Meanwhile, commenting on the REL takeover tussle, some analysts and corporate governance firms contend that the managerial resistance to give up on the power of a promoter-less company (REL) raises some serious governance concerns. The Religare board stands in contradiction of claiming the open offer of ₹235 per share to be low while at the same time the Chair, Rashmi Saluja, exercised options and sold shares of REL in September 2023, they said.

Meanwhile, a REL spokesperson said that the process for ESOP exercise through financing and sales thereof by Rashmi Saluja, Executive Chairperson and other 12 employees were set in motion several days prior to the said meeting that happened on September 20 evening. The share sale proceeds by Rashmi Saluja were utilized to invest in additional ESOPs of Religare Group entity only, the spokesperson added.

In the said allegation, the approvals for the sale were already in place months before the said meeting, the REL spokesperson said. 

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