Corporate battles are always fascinating to chronicle, and India has seen quite a few, big and small. So, it’s not surprising that Indian corporate and business circles are busy discussing the latest boardroom battle that is currently playing out—the feud between the Burman family of Dabur and the board of the Rs 6,300-crore financial services company Religare Enterprises, in particular its Executive Chairperson Rashmi Saluja. In a nutshell, the story is that the Burmans badly want Religare, but Saluja and her colleagues on the board are resisting the takeover attempt tooth and nail. Add the regulatory angle with the Securities and Exchange Board of India (Sebi) to the mix and you have the perfect corporate potboiler. The Burmans have been eyeing Religare since 2018 when they picked up a stake in the company.
Since then, they have raised their stake bit by bit, even as the firm faced challenges. In September 2023, the Burmans’ stake crossed the 25% threshold, beyond which they had to make a mandatory 26% open offer under Sebi regulations. But Saluja and the Religare management have resisted the open offer move and contend that the Burmans do not meet the ‘fit and proper’ criteria for owning the enterprise. On the other hand, serious charges of corporate governance lapses—especially on Saluja’s high remuneration and stock options—have been levelled against her and the board, and markets regulator Sebi has had to step in. In our cover story, Krishna Gopalan brings you the nuances of this bitter corporate face-off.
The latest twist in this story is the Sebi order cum-show-cause notice of June that ordered Religare to make the necessary applications to the various regulators—including the Reserve Bank of India and the Insurance Regulatory and Development Authority of India—for the open offer that Religare has attempted to stall for months. Religare then petitioned the Securities Appellate Tribunal (SAT) that, while ordering a stay on the show-cause notice, asked the company to file the open offer papers anyway. For the Burmans, acquiring Religare makes eminent sense. The turbulence of the past (former promoters Malvinder and Shivinder Singh were mired in controversy and eventually arrested) is now behind it, and the company has demonstrated a turnaround. Besides, it ties in well with the Burmans’ own financial services business and there are growth opportunities that Religare can tap, not least in the booming health insurance space.
Saluja, meanwhile, is in no mood to let go and says she has the full backing of the Religare board. She believes the time now is for Religare to unlock value. Most experts believe this battle is far from over and will play out over the next few months as RBI also gets into the picture. Will the Burmans finally get Religare? Will Saluja be able to fend off the takeover? This will continue to be one interesting story to track.