CCI seeks details from Religare Enterprises on Burmans' role, merger plans: Report

Competition Commission of India (CCI), India’s competition watchdog, has reportedly written to Religare Enterprises seeking information whether the Burman family had sought a merger involving the company, proposed to get involved in its management or have representation on its board. Burman family is the largest shareholder in Religare Enterprises. 

As per a report in The Economic Times, the CCI has also sought all the communication documents exchanged between the Burmans and Religare from October 13, 2017 to September 25, 2023. The promoters had acquired shares in Religare Enterprises in that period. 

According to the competition watchdog, the Burmans did not inform it about their initial acquisition of the Religare shares but have now sought approval for their proposed purchase of 5 per cent stake through secondary market transactions and the planned open offer to buy 26 per cent from the company’s public shareholders.

As per the report, Religare stated that there have been no communication with the Burmans over a merger or management of the company’s affairs but their actions show intention to gain control of the financial services unit. Religare said that the initial share acquisitions with the proposed stake purchases and open offer are interconnected. 

In their first investment in 2018, the Burmans picked a 10 per cent stake in the company by subscribing to share warrants and subsequently converting it to equity, following which they increased their stake to 14 per cent and later to 22 per cent. After that they announced a proposal to acquire 5 per cent of Religare shares from the secondary market and an open offer for additional 26 per cent stake. As per the report, Religare stated that the Burmans artificially segregated certain steps of the fourth acquisition and “wrongfully evaded” the requirement of obtaining CCI’s approval. 

Reports of CCI seeking information about the Burmans come amid a tussle between the family and Religare. Religare Enterprises independent directors had levelled allegations of fraud and other breaches against the Burmans with regulators SEBI, Insurance Regulatory and Development Authority of India (IRDAI) and Reserve Bank of India (RBI). REL’s independent directors have alleged that the Burmans are in material breach of regulatory obligations. SEBI asked REL to provide evidence and documents to back the allegations. The Burman family denied the allegations. 

In a twist, the Burman family wrote to SEBI and the stock exchanges seeking a probe against Religare Enterprises Chairperson Rashmi Saluja’s trade in the shares of the firm. Four entities controlled by the Burman family wrote to SEBI stating that Saluja sold a portion of her personal holdings in the firm soon after a meeting with a representative of the Burmans. 

Also read: Dabur’s Burmans now seek probe into Religare Chairperson Rashmi Saluja’s share sale

Also read: Religare independent directors move against Burmans’ takeover plan; write to Sebi, RBI, IRDAI