The Securities and Exchange Board of India (SEBI) closes proceedings against Religare Enterprises, former chairperson Rashmi Saluja, and five current and former directors, saying its preventive objective is achieved following the Burman Group takeover. SEBI disposes of an interim order-cum-show cause notice issued on June 19, 2024 without imposing fresh regulatory directions. The regulator concludes that with the completion of the Burman Group’s open offer and the resulting change in control of Religare, no further directions are warranted.
SEBI had earlier initiated proceedings alleging that Religare and its board failed to cooperate with the mandatory open offer triggered when the Burman Group sought to raise its stake beyond the 25% threshold under the takeover regulations. SEBI said Religare delayed the open offer process and questioned the Burman Group’s “fit and proper” status, while also refusing to apply for approvals from the Reserve Bank of India (RBI), IRDAI and SEBI, despite being advised to do so. SEBI had also alleged that the open offer could not proceed because the RBI would accept the application only from the target company.
During the proceedings, some independent directors argued they relied on representations made by Saluja and acted based on independent legal advice, while Saluja argued that responsibility for statutory approvals lies with acquirers and that the company acted in good faith.
