Religare AGM Delay: Company dismisses allegations of regulatory violations by Proxy advisory firm InGovern

“… the postponement of the Religare AGM raises significant concerns about governance, shareholder rights, and the overall stability of the company. The lack of a clear explanation for the delay has left shareholders feeling uneasy, prompting discussions about potential actions they may take in response,” stated a report by InGovern.

InGovern said SEBI should scrutinise the postponement decision of the company and the “decision-making processes that led to the delay”.

Also Read: SAT orders Religare to apply for Burman Group's open offer by July 22

“If SEBI finds that Religare has breached any regulations, it can impose significant penalties on the company or its executives. These penalties may include hefty fines or even restrictions on future share issuances until the company demonstrates full compliance. Such measures are intended to send a strong message and deter similar infractions in the future,” stated the report.

The listed entity is a subject of investigations with the Ministry of Corporate Affairs asking the Serious Fraud Investigation Office (SFIO) to probe into the affairs of Religare Enterprises and Religare Finvest. During the investigation, financial transactions between the companies under investigation and the transferor firms were noticed, which could adversely affect the ongoing probe, as per the report by InGovern.

There are allegations related to violation of insider trading regulations with the Burmans alleging that Executive Chairperson Rashmi Saluja sold shares while in possession of undisclosed price sensitive information. SEBI is investigating potential insider trading violations linked to Saluja.

The AGM is also important in the context of Saluja’s tenure as she is due for re-appointment. She is slated to retire by rotation at the originally scheduled AGM in September. As the only non-independent director, her position requires re-appointment at each AGM, making the timing of this delay critical, stated the report.

Also Read: Religare-Burman saga brings forth a key inconsistency in Sebi and RBI rules for takeovers

“This decision has left shareholders frustrated, as the company has not provided a valid reason for the delay, especially since the financial accounts were already filed with the exchanges… The postponement may indicate underlying issues, such as governance disputes or unresolved strategic decisions,” stated the report.

While quoting the company statement, the report highlighted that “pending statutory/regulatory approvals in relation to the ongoing Open Offer and the potential impact on the Company and its shareholding pattern” were attributed as the reasons for seeking postponement.

It has been nearly a year since Burman family, which is the largest shareholder in the company, announced an open offer to acquire another 26 per cent stake at a price of Rs 235 per share.

Shares of Religare Enterprises closed at Rs 275 on Friday. The shares have gained around 29 per cent in the last six months.

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