The Securities and Exchange Board of India (SEBI) has concluded proceedings initiated in 2024 against Religare Enterprises, its former Executive Chairperson Rashmi Saluja and five others over alleged non-cooperation during the Burman Group's open offer. According to reports from CNBC TV18 and The Economic Times, the regulator stated that no further regulatory directions are required as the Burman Group's open offer and takeover have already been completed. SEBI's Quasi Judicial Authority Biju S noted that while different claims and contentions have been advanced by the parties, they do not call for determination at this stage since the principal issue has already been resolved. As per The Economic Times, SEBI disposed of the proceedings on Friday, holding that the remedial objective of the proceedings had already been achieved.
The proceedings stemmed from an interim order-cum-show cause notice issued on June 19, 2024, alleging that REL and its board had failed to cooperate during the open offer process by not facilitating statutory approvals required from regulators, including the Reserve Bank of India. As reported by CNBC TV18 and The Economic Times, SEBI had alleged violations of takeover and listing regulations by the company and its directors. The regulator alleged that the company violated its takeover code by delaying the process and repeatedly questioned the Burman Group's 'fit and proper' status. According to The Economic Times, SEBI had alleged that REL refused to apply for approvals from the Reserve Bank of India, IRDAI and the market regulator despite being advised to do so, with the regulator noting that the open offer could not progress because the RBI would accept the application only from the target company.
Referring to past Securities Appellate Tribunal rulings, SEBI reiterated that powers under Sections 11 and 11B of the SEBI Act are preventive and remedial rather than punitive. According to the order reported by CNBC TV18, since the alleged irregularity had been cured and corrective measures implemented, no further directions were necessary. The interim order had directed Religare to facilitate the open offer, seek the necessary regulatory approvals and ensure the constitution of the committee of independent directors. As per The Economic Times, SEBI stated that the remedial objective of the proceedings had already been achieved, with the regulator noting that the alleged irregularity had been cured and corrective measures implemented.
While independent directors argued that they had relied on representations made by Rashmi Saluja and were not involved in the company's day-to-day affairs, as per the order reported by CNBC TV18, Saluja and Hamid Ahmed have claimed that the Committee of Independent Directors (CoID) functioned independently. They had obtained legal opinions from reputable entities which indicated that the open offer was not beneficial to REL and its shareholders. During the proceedings, several independent directors argued they had relied on representations made by Saluja, whom they alleged later misled them about the Burman Group. They maintained that they were not involved in the company's day-to-day affairs and had acted on independent legal advice. According to The Economic Times, Saluja, in her defence, contended that the obligation to obtain statutory approvals rested with the acquirers and that REL acted in good faith over governance and 'fit and proper' concerns.
