NEW DELHI: The Burman family is seeking an investigation into the allotment of 2.14 crore shares, constituting 8% of Religare Finvest Ltd (RFL), a subsidiary of Religare Enterprise Ltd (REL), to executive chairperson Rashmi Saluja through Employee Stock Ownership Plans (ESOPs).
The investigation is to check whether the ESOP allocation is in compliance with SEBI takeover regulations, they said. The rift between the Burmans, the largest stakeholder in REL, and the current management has again intensified as it has come to notice that Saluja was allotted the ESOPs in RFL a day after the Burmans announced an open offer to buy additional shares to take over a controlling stake in the diversified financial company.
“It is unfortunate that a solitary executive has cornered significant quantum of remuneration through ESOPs at REL, Care Health Insurance, and RFL, all without approval and requisite disclosure to REL shareholders,” said a Burman Family spokesperson on Wednesday. The Burmans raised question mark on the management and the independence of the independent directors of REL and their complicity in what they call “unjustified dole outs”. “REL board should answer the shareholders whether there exist more instances of ESOP issuances to entities, and potential conflicts of interest,” said the Burman Family spokesperson.
As per sources, the estimated value of the RFL ESOP award is in the tune of `200 crore. In November 2023, proxy advisory firm InGovern had valued the stock options of REL and its subsidiary, Care Health, issued to Saluja over the past three-four years at over `480 crore. Religare Board on Wednesday said that it upholds the highest standards of corporate governance and compliances in all transactions and stands by REL Management.
“The approval sought at AGM of RFL held on Sep 26, 2023, was to seek enabling approval of shareholders for proposed grant of ESOPs of RFL to Rashmi Saluja under RFL ESOP Plan 2019. The Notice of aforesaid AGM was issued on Sep 1, 2023, and submitted to BSE accordingly by RFL,” Religare board said in a statement.
This clarification came amid reports that no declaration regarding this ESOP was made to investors. The Burman family, the promoter of FMCG major Dabur, had in September announced a Rs 2,116 crore open offer to acquire up to 26% additional stake in the REL.
Burmans raises question mark on management
The Burmans raised question mark on the management and the independence of the independent directors of Religare Finvest and their complicity in what they call “unjustified dole outs”. According to sources, the estimated value of the Religare Finvest ESOP award is in the tune of Rs 200 crore.