Proxy governance firm raises red flag over Religare's fund infusion into MIC Insurance

A proxy governance firm has raised red flag over plans of Religare Enterprises to infuse fresh funds into its subsidiary MIC Insurance Web Aggregator. Religare has sought shareholder approval for infusing Rs 15 crore fresh capital by the way of subscription to shares. The postal ballot is currently in progress and the results would be announced on March 23.

In a research report, proxy advisory firm InGovern observed Religare board has not provided any rationale for the fund infusion and has also not disclosed any details regarding financials or valuations of MIC.

Normally, listed companies don’t need to seek shareholder approvals for smaller fund infusion transactions. However, in the current case Religare needs a shareholder nod since it is on verge of being taken over by the Burman Group. The open offer for the same in currently in progress.

“Given the uncertainty and regulatory probe which Religare is already subjected to, as well as the imminent change in promoters and management which may take place post takeover by Burman group, the above investment should be kept at bay at this juncture. We recommend shareholders vote against the resolution,” InGovern said in a report published this month.