MUMBAI: The market regulator Sebi has refused to give any exemption to Digvijay Laxhamsinh Gaekwad (Danny Gaekwad Developments & Investments, Florida) to make a competing offer to the Burman Group's open offer for Religare Enterprises (REL) and termed his offer as frivolous.
The regulator also noted that the applicant has failed to submit Rs 600 crore deposit, as directed by the Supreme Court.
Gaekwad submitted the applications seeking exemptions on January 24 and 26, and February 1, 2025.
In an order issued by the Securities and Exchange Board (Sebi) on Friday, the regulator noted that 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 and that the application itself is not bonafide and is frivolous.
"As the applicant has sought to make a competing open offer for 55% of the outstanding share capital of the target company (REL), any such open offer can succeed only if required regulatory approvals are obtained by the applicant from various regulators, including Sebi and RBI.
“However, it is noted that the applicant is yet to apply for any of such approvals. Further, even if applications are made 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, " Sebi said in the order.
The order further noted that “this (allowing exemption) 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 open offer is Rs 275/share, (a premium of Rs 40/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. "
"As on today, the applicant has failed to deposit Rs 600 crore, as directed by the Supreme Court on February 7, 2025 read with order dated February 12, 2025, which would have shown the applicant’s commitment towards making the open offer.
“In the absence of adequate proof of financial resources required for making the competing open offer, the application does not appear to be bonafide. It seems frivolous and aimed solely at hindering the open offer process," said the order.