Indian markets regulator Securities and Exchange Board of India (SEBI) has asked Religare Enterprises to apply for approvals to let the Burman family buy more shares in the financial services company.
This comes as a blow to Religare that has been attempting to block the move. The Burmans, who helm consumer goods conglomerate Dabur India, raised its stake in Religare to nearly 25 per cent. This triggered the open offer requirement that allows them to buy more shares from public shareholders. But Religare said the open offer was riddled with irregularities and statutory violations. They said such concerns “cast serious doubts on the fit and proper status of the acquirers.”
Due to the lack of cooperation from the company, the Burmans approached SEBI. The Burmans aim to bolster its presence in the growing financial services sector.
SEBI on Tuesday asked Religare to furnish an undertaking that it will apply to regulatory authorities by July 12, including Reserve Bank of India, for approvals for the open offer. It asked Religare to form a committee of independent directors, if not already done.
BURMANS VS SALUJA
Both the sides – Burmans and Religare Enterprises’ Chairperson Rashmi Saluja – are meanwhile engaged in a bitter dispute with both sides accusing the other of violations of regulations. Burmans had complained to SEBI and accused Saluja of selling 1.29 million shares after a representative of the family informed her of their intention to make an open offer to acquire control of the company. On the other hand, Religare independent directors wrote a letter to SEBI, RBI and IRDAI, leveling allegations of fraud and other breaches by the Burmans.
(With Reuters inputs)
