SEBI refuses exemption to Danny Gaekwad to make open offer for REL; calls attempt seemingly "frivolous"

The regulator noted that the applicant had failed to submit Rs 600 crore deposit, as directed by the Supreme Court of India

The market regulator has refused to give exemption to Digvijay Laxhamsinh Gaekwad (Danny Gaekwad
Developments & Investments, Florida) to make a competing offer to Burman Group's open offer for Religare Enterprises Ltd (REL).

Gaekwad had submitted the application via letters dated January 24, 2025, January 26, 2025 and February 1, 2025.

But as the order issued by the Securities and Exchange Board of India (SEBI) on February 14 noted Gaekwad has neither applied for regulatory approvals needed to make the open offer a success nor has demonstrated the ability to meet such a financial obligation.

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In the order, SEBI said, "As the Applicant has sought to make a competing open offer for 55% of the outstanding share capital of the Target Company, any such open offer can succeed only if required regulatory approvals are obtained by the Applicant from various regulators, including SEBI and RBI. It is noted that the Applicant is yet to apply for any of such approvals. Further, even if applications are made by the Applicant for such approvals, there is no certainty that the approvals would be granted in the first place. Further, it is noted that in case the Applicant applies for various regulatory approvals, the processing of such applications is likely to take time. "

This would be prejudicial to the Burman Group which has already devoted considerable effort, time and resources to be able to make an open offer and to the shareholders who have tendered their shares to the Burman Group, the order said.

On the financial ability of the applicant, the order said, "It is noted that although the price offered by Applicant in the proposed competing open offer is Rs. 275 per equity share, (a premium of Rs.40 per equity share over the offer made by the Burman Group), the Applicant has failed to demonstrate his ability to meet the financial obligation for making the competing open offer. "

It added, "As on the date of this order, the Applicant has failed to deposit Rs.600 Crore, as directed by the Hon’ble Supreme Court of India vide its order dated February 07, 2025 read with order dated February 12, 2025, which would have shown the Applicant’s commitment towards making the competing open offer. In the absence of adequate proof of financial resources required for making the competing open offer, the Application by the Applicant does not appear to be bonafide. It seems frivolous and aimed solely at hindering the open offer process."