Religare board counters Burmans charge over ESOPs, calls it misleading

The board at Religare Enterprises on Thursday called charges levelled by the Burman family over ESOP allocation as "false claims without evidence."

The Burman family, owners of Dabur India Ltd., had demanded a probe into the allotment of shares of Religare Finvest to Rashmi Saluja, the Chairperson of Religare Enterprises Limited, through employee stock ownership (ESOP). The family alleged that 2.14 crore shares, around 8% of the company's equity, were allotted to Saluja without approval and requisite disclosure to parent Religare Enterprises shareholders.

Terming it as misleading and far from truth, the board in its response to the Burman charge said "such misinformation impacts shareholder value and erodes confidence in Indian corporate ethic, and must be dealt with immediately with the highest level of urgency".
 

"We are a professionally managed company governed by the regulators of our country with the deepest of scrutiny. We must trust the regulators and the process and allow the company to operate to its full potential," it said in a statement.

The Burman family had announced an open offer in September 2023 to acquire up to 26 per cent stake in REL for Rs 2,116 crore. They expressed disappointment that a single executive had received a significant amount of remuneration through ESOPs, which are valued at approximately Rs 250 crore. The figure has become a point of contention between the Religare board led by Saluja and the Burman family, which has invested around Rs 900 crore to Rs 1,000 crore in the financial service provider.
 
Burman family had approached SEBI to investigate the sale of shares by Saluja after the announcement of the open offer.

The family said such actions have "eroded trust and confidence in the REL board, necessitating urgent need to restore credibility" in a statement.

"Religare is at an inflexion point due to the tireless efforts of the board and the management over the last five years. A historic revival and one time settlement of RFL was completed through organic collections and payments of more than Rs 9,000 crore made to the country’s banking system. As a result of the overall growth of all businesses, the company’s market cap has remarkably increased to about a billion dollars from a low of under USD 100 million in March 2018. Religare has now grown into a leading financial services player and has enhanced value for all its stakeholders, including shareholders, employees and customers while maintaining the highest levels of corporate governance," the board said in a statement.