REL board defends Rashmi Saluja
Terms allegation of paying excessive remuneration to chairperson ‘false and erroneous’
NEW DELHI: The board members of Religare Enterprises (REL) on Monday defended chairperson Rashmi Saluja who is facing allegations of violating insider trading norms and receiving ESOPs worth rupees hundreds of crores despite regulatory disapproval. REL termed the allegation ‘false and erroneous’
This move by the board of Religare comes as the company is facing a takeover (via open offer) by the Burman family of FMCG major Dabur. “Religare board denies allegations raised by certain people with vested interests. The board and the Management are committed to the highest levels of governance, ethics and integrity. Religare is committed to offering its support to respective authorities for any kind of further clarification on the facts mentioned below,” said REL board members in a statement on Monday.
The clarification by the board comes after InGovern Research, a proxy advisory firm, valued the stock options issued to Saluja over the last three-four years at over `480 crore. InGovern called for a probe by the Insurance Regulatory and Development Authority of India (IRDAI) and capital market regulator SEBI. In a note last week, InGovern said the employee stock ownership plan (ESOPs) of Care Health, a REL subsidiary, were issued to Saluja despite IRDAI’s rejection and without REL shareholders’ approval.
The Religare board clarified that while Care Health has an ESOP pool of 12.5% of equity for its employees, another 2.50% pool is meant for employees of the Religare Group. Saluja - as an employee of REL - was granted 22,711,327 options (to purchase shares of CARE) from the above-mentioned pool with exercise price per option at `45.32 per share in June 2022.
The board noted the Care Health ESOPs were granted to Saluja only in her capacity as employee/executive director and Chairperson of REL. “The ESOPs were not to be granted to her in her capacity as non-executive Chairperson of Care Health Insurance Limited. The above issuance of ESOPs to EC (Saluja) has been in full conformity with the guidelines of the Insurance Regulator applicable to insurance companies,” the members said.
On allegations levied by the Burmans of selling shares after knowing about the open offer, the board reiterated that Saluja was not informed by the representative of the Burman family about the proposed open offer in a meeting on September 20, 2023. They added that the process of liquidation of ESOPs through financing and sale was set in motion several days before the said meeting.
Since the Burmans on September 25 announced their intention to acquire Religare, the two sides have exchanged serious blows. Religare board has accused the Burman family of market manipulation and their involvement in various “frauds and financial improprieties” which are under investigation. The Burman family has accused Saluja of violating the insider trading rules and raised objections on her high compensation, which they term is over Rs 150 crore.
Burman’s takeover bid
This move by the board of Religare comes as the company is facing a takeover (via open offer) by the Burman family of FMCG major Dabur. The clarification by the board comes after InGovern Research, a proxy advisory firm, valued the stock options issued to Saluja over the last three-four years at over Rs 480 crore