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

On Wednesday, shares of Religare Enterprises lost 2.14 percent to close at Rs 238.25.

The Securities Appellate Tribunal (SAT) has directed Religare Enterprises to file for all requisite regulatory approvals for facilitating the open offer by Burman Group by July 22.

The latest development comes on the back of an appeal filed by Religare Enterprises to challenge an order by the Securities and Exchange Board of India (Sebi) that, among other things, directed the listed entity to apply for an open offer by July 12.

The application has to be made to the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority (IRDAI) as well along with Sebi since Religare operates in the NBFC and insurance segments too.

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

Further, the SAT directive is likely to pave the way for the Burman family to go ahead with an open offer as it now owns more than 25 per cent in the listed company – it has hiked its stake in a phased manner between April 2018 and August 2023.

Meanwhile, Sebi, in an interim order issued on June 19, directed Religare Enterprises and its management to submit an undertaking that they will apply to the regulatory authorities including RBI, on or before July 12 for all the requisite statutory approvals required for the open offer.

“It is clear …. that the refusal of the Target Company (Religare Enterprises) to seek statutory approvals from regulators which would enable the Acquirers (Burman Group entities) to discharge their legal obligations and provide an exit option to shareholders in the open offer defeats the objects of the law and goes against the established canons of corporate governance. The management of the Target Company is representative of the shareholders and cannot act against the rights and interests of the shareholders,” stated the Sebi order.

Religare, however, had challenged the Sebi order while questioning the jurisdiction of the capital markets regulator.

Also Read: Burman Family acquires additional 3.6% stake in Religare Enterprises

The interim order had also asked the company’s chairperson Rashmi Saluja and the management as to show cause why suitable action should not be taken against them for alleged non-cooperation in the open offer by the Burman Group.

SAT, however, said that Sebi cannot act against the entities till the next hearing of the matter, which is scheduled on August 29.

Burman family group entities had made a public announcement in September last year to acquire shares representing 26 percent of REL’s expanded voting share capital at a price Rs 235 each.

On Wednesday, shares of Religare Enterprises lost 2.14 percent to close at Rs 238.25.

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