Won’t retreat under ‘false’ allegations: Religare’s Rashmi Saluja amid tiff with Burmans

Rashmi Saluja, executive chairperson of Religare Enterprises, is confident of her performance and won’t retreat under ‘false’ allegations made by the Burman family, the leading shareholder seeking majority control of the financial company. 

In an interview with The Economic Times, Saluja said that she has the full support of the board and is proud of her turnaround credentials, the results of which are evidenced by what she described as a tough phase for non-bank lenders.

“I may have agreed that five years ago, I didn’t have the experience, but after five years, three successful businesses, a company turnaround and a great team and board to support me, I will not back down,” Saluja told ET, adding “Any allegations of corporate governance against the board and the management are directly reflected toward the regulators. Our naysayers need to understand that.”

The board of Religare Enterprises is in a tussle with members of the Burman family, the promoters of Dabur, who accused Saluja of insider trading by selling shares of the company immediately before the announcement of an open offer on September 25, 2023. 

The Burman family has been gradually hiking its stake in Religare Enterprises over the past five years – from 9.9 percent in 2018 to 14 percent in 2021, with another 7.5 percent and 5.27 percent additions in 2023. The stake hikes automatically triggered an open offer to the minority shareholders. A full subscription to the offer would automatically give majority control of the company to the Burmans.

On the other hand, the Burman family has accused Religare’s existing management, including Saluja and the board, of lapses in corporate governance.

They have also sought an investigation into the allotment of 8 percent shares of Religare Finvest to Saluja through Employee Stock Ownership Plans (ESOPs).

Meanwhile, the independent directors of Religare have levelled allegations of fraud and other breaches against the Burmans with the Securities and Exchange Board of India (Sebi), the Insurance Regulatory and Development Authority of India (IRDAI), and the Reserve Bank of India (RBI) on the takeover process.

Saluja denied allegations of insider trading and manipulation in stock awards and compensation. “Not once during the five years was any complaint raised to Sebi or any regulator. The moot question to ask is, why now?” she asked.

She brushed aside allegations by the Burman family that Religare had applauded the takeover bid before rejecting it. “The board initially considered the Burmans’ takeover bid as per Sebi’s directive. However, as per the responsibility of a well-governed board, subsequent assessments were made, wherein many aberrations were found in the submission. We shared our comments with regulators,” Saluja told ET. “We cited concerns for investigation on matters concerning market manipulation, funding sources, and inconsistencies in statements made to the BSE.”

The Religare Enterprises chairperson also lauded efforts made by her colleagues to turn around the company when several other lenders and financiers like Dewan Housing Finance, Yes Bank, IL&FS and Reliance Capital needed special dispensations, bailouts or administrative buyouts for survival.

Religare Finvest, the MSME financing arm, has completed an industry-first settlement with all its lenders and the fraud tag has been removed, she added. “The board and the current management have been at the helm for more than five years and are in the best position to guide the company to catapult to the next growth phase,” she told ET.

Saluja joined as an additional non-executive independent director on December 20, 2018. Later, she was appointed the non-executive independent chairperson. On December 10, 2019, the board designated her as the executive chairperson, which was subsequently approved by the RBI.