New Delhi, Nov 10 (PTI) Burman family -- the promoters of Dabur -- has filed a complaint with regulatory authorities seeking a probe into sale of shares by Religare Enterprises Ltd's Chairman Rashmi Saluja.
As per the complaint, Saluja sold her share in Religare Enterprises Ltd (REL) immediately after the Burman family disclosed to her that they intend to make an open offer for the financial services firm.
Entities controlled by the Burman family -- promoters of FMCG major Dabur -- have written to the Securities and Exchange Board of India (Sebi) and stock exchanges that Saluja sold a portion of her personal holdings in Religare Enterprises Ltd a day after meeting a representative of the Burmans on September 20.
Saluja at the meeting was informed about the intentions of Burmans, who held a 20.15 per cent stake in REL and had bought another 5 per cent, to make an open offer to buy another 26 per cent stake from open market to take a controlling stake in the financial services firm, Dabur India Chairman Mohit Burman told PTI in an interview.
REL management on September 25 welcomed the open offer but later said the offer price of Rs 235 per share is undervalued.
REL shares were trading at Rs 221.85 on the BSE on Friday.
Burman family head Mohit Burman told PTI he was surprised at the change of stance.
"Maybe some of the people do not want to let go of the control," he said.
Religare, however, refuted the allegation of Saluja selling shares after being made aware of the open offer, saying the chairperson had sold ESOPs after a long process that was triggered several days prior to the September 20 meeting.
The process for ESOP exercise through financing and sales by Saluja and other 12 employees was set in motion several days earlier, a spokesperson of REL said.
Four entities of the Burman family -- MB Finmart, Puran Associates, VIC Enterprises and Milky Investment and Trading Co -- have written an e-mail to Sebi, a copy of which was seen by PTI, in which they have alleged serious lapses on sale of personal share by REL Chairperson Rashmi Saluja.
Their representatives in a 45-minute meeting on September 20 had informed about their intention to bring an open offer and this was communicated to the chairperson in her professional capacity.
However, much to their "surprise", the chairperson sold 12.93 lakh shares on September 21 and 22, representing 0.4 per cent share capital of REL.
Burman family entities, which collectively hold 21.24 per cent in REL, wrote this to the board of the company and approached Sebi and also to the NSE and the BSE, informing them about this sale after they failed to get any response from the company.
"Rashmi Saluja categorically denies the fact that the representative of the Burman family informed her of the proposed open offer during the meeting... as per standard corporate governance, exercising of listed stock options by employees requires requisite approvals which span across several months before the actual sale… "In the said allegation, the approvals for the sale were already in place months before the said meeting," REL spokesperson said while replying to a query.
Burman family, a promoter of Dabur India and other entities such as Eveready Industries, through its entities, had in September announced a Rs 2,116 crore open offer to the shareholders of REL to acquire up to 26 per cent stake in the company.
However, the independent directors of the REL have raised red flags alleging fraud and other breaches by Burman family entities and had regulators including Sebi, the Reserve Bank of India and the Insurance Regulatory and Development Authority.
Asked about the allegation, Burman said, "I have been told about independent directors, but there are no names." "How does a board of a company like this, have not even one shareholder representative as board member? Only one independent director has been appointed by one person. I am yet to see which independent directors are opposing this offer," he added.
These are the same independent directors, who had welcomed us when the Burman family put money in July this year.
"And they made us anchor the preference and thanked us for putting money in. At that time, they did not have any problem with us. The minute we launched an offer to take control of the company, the problem started," he said.
Despite being a 100 per cent shareholder-owned company and there is no promoter there are no shareholder representatives on the board, he said.
Burman further said they were promised representation on the REL board, when they invested, however, nothing ever came in.
On being asked as to whether there were any negotiations before the launch of the open offer, Burman said, "No. There were no negotiations." "As good corporate citizens, we told them that we will be launching an offer because we do not want to surprise somebody. Imagine you are the executive chair of a company and somebody launches an offer," Burman said, adding, "we told them politely, we do not want to change alter the board post offer. When the offer is completed as per the guidelines, we will supplement the board." When asked the possible reason for the change in stance, Burman said, "I think they should answer for this. We are surprised like you are." "Maybe some of the people do not want to let go of the control," he said.
On their open offer, Burman said it requires regulatory approvals from Sebi, RBI, and Irdai and is making the relevant applications.
"We are in touch with the relevant regulators and hopefully that will all happen. It takes its own time and we will stay the course to the process," said Burman, expecting to get all required approvals in the next 3-4 months. PTI KRH DP ANZ TRB TRB TRB