MUMBAI: Diversified financial firm Religare Enterprises Ltd (REL) on Monday said its board is seeking a governance review of the company and its two units. The board has also approached the Burman family, the new promoter of the company, for funding support.
“…the Board of Religare Enterprises Limited has commissioned a governance review of REL and its subsidiaries, namely, Religare Finvest Limited and Religare Housing Development Finance Corporation Limited… For conducting this review, the Board of Directors have resolved to engage a law firm M/s Trilegal who would be assisted by M/s Grant Thornton Bharat LLP.” said Religare in a regulatory filing.
The objective, as per the company, is to review the past operating practices, suggest improvements around systems & controls for future implementation and to identify any potential instances of misconduct by certain current and/or ex-employees of the aforementioned companies.
While the company has not named any particular individual whose actions will be reviewed, the rift between the former chairperson Rashmi Saluja and the Burmans is well known. The Burmans had earlier objected to the compensation and E-SOPS allotted to Saluja.
The Burman family, who owns the FMCG major firm Dabur India, acquired control of Religare in February after a 17-month takeover battle. Former board members, led by Saluja, opposed Burmans’ takeover till the very end. She was ousted from the board last month as her reappointment did not go through.
Religare also said it observed a "cash-flow gap" over the next few months and has decided to approach the Burmans for immediate funding support to sustain the operations of the company.
“The Board has reviewed the fund flow position of the Company and observed a cash flow gap over the next few months. After examining the various options, the Board has unanimously decided to approach the new Promoters, the Burman Group, for immediate funding support to sustain the operations of the Company,” REL said in the filing.
To address the funding requirements, the Board has recommended a short-term Inter Corporate Loan from the Promoter Group or its Associate Entities. The company did not specify details regarding the extent of the funding.