Burmese demand removal of Religare’s Rashmi Saluja ahead of AGM amid regulatory scrutiny

He burmese familythe largest shareholder of Religious Enterprises, has written to the company, its subsidiary Care health insuranceand the investor Kedaara Capital, who seek the elimination of Rashmi Saluja of the insurer’s board before its Annual General Assemblysaid people familiar with the development.

This marks the latest salvo in the battle between the Burmese and the Religare led by Saluja.

The Burmese alleged in a Sept. 27 letter that Saluja is “unfit” to be re-appointed as non-executive chairwoman of Care Health, citing recent actions against her by regulatory and investigative agencies. Care Health’s 17th annual general meeting is scheduled for Monday and the reappointment is one of the key items on the agenda.

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Religare owns 63% of Care Health, while private equity firm Kedaara owns 16% and employees 10%. The Burman family, Care and Kedaara did not respond to ET’s questions. The Burmese, the promoters of Dabur, who own about 26% of Religious The companies have been pushing for it to make an open offer for another 26% as required by takeover rules. Saluja and the company’s management, after having welcomed this measure in September last year, have opposed the measure, calling it hostile.In their letter dated September 27, the Burmese cited a first information report (FIR) registered against Saluja on September 6 by the Enforcement Directorate (ED) on charges of criminal conspiracy and cheating, as well as a case information report of execution within the framework of the Prevention of Money Laundering Law. They also cited a Securities and Exchange Board of India (Sebi) exhibit notice on stock market transactions in alleged violation of insider trading rules.

In the letter, which ET reviewed, the family cited a Care Health article that makes Saluja ineligible. “If any director or key management person is an unsuitable person, unless otherwise agreed in writing by the promoter and the investor, they shall take all necessary steps to remove such unsuitable person from office,” according to the letter. The Burmese said an “unsuitable person” would be anyone facing prosecution by a government authority or a charge sheet unrelated to the company’s business for an offense that carries a prison sentence of more than six months, or someone who has committed fraud or other criminal acts. Such a person remains “inappropriate” until a court or tribunal quashes the charge sheet, the letter said. The Insurance Regulatory and Development Authority of India (IRDA) in July ordered Care to buy back 7.57 million shares allotted to Saluja and imposed a fine on it. fine of Rs 1 million for failure to obtain prior approval for such remuneration. The Securities Appellate Tribunal subsequently stayed the IRDA order for 12 weeks.

In the case filed with the Mumbai Police, the ED accused Saluja of registering a case against Dabur Group Chairman Mohit Burman and his family members “derailed” the proposed acquisition of Religare and its subsidiaries, and obfuscated the detection of illegal profits accrued by Saluja through the acquisition of share options of Care Health.

The ED found that Vaibhav Gawli, an office assistant at a pet cafe, was allegedly given Rs 2 lakh and ordered to purchase 500 shares of Religare Enterprises worth Rs 1.20 lakh, to become a shareholder and be eligible to file a complaint. The remaining Rs 80,000 was given to him for filing the police complaint against the Burman family, according to the FIR seen by ET.

The ED also accused Saluja and others of making “illegal profits” of Rs 179.54 crore by purchasing options on shares of Care Health at a low price and diverting funds from Religare to subscribe for rights issues of Care.