The Religare Rancour: Delhi High Court Calls Danny Gaekwad's Offer Infructuous, Refuses To Halt AGM

The Delhi High Court on Thursday refused to halt the annual general meeting or AGM of Religare and mentioned that the offer made by US based businessman, Danny Gaekwad, is infructuous as his letter seeking permission from SEBI to do so has already been returned.

The high court was hearing the petition filed by Sapna Rao, a minority shareholder of Religare Enterprises Ltd with 500 shares. She was supporting Gaekwad's offer.

Rao's petition had also mentioned that the conditional approval given to the Burman family by the Reserve Bank of India was not in consonance with the acquisition and takeover regulations of the Securities and Exchange Board of India. She sought to stop the Dabur fame Burman family's acquisition of the company's stake.

Rao was represented by Senior Advocate CA Sundaram.

Gaekwad’s offer spoke of a 17% premium over the Rs 235-a-share offer made by Burman family for a 26% stake in Religare. In addition to this, his offer is for a 55% stake in the company.

However, when Gaekwad’s offer surfaced, the Burman family had also released a media statement in its response. The statement mentioned that his offer was not a formal one, as he only sought permission from SEBI to be able to do so. The Burmans further mentioned that Gaekwad was already late in making the offer.

The Burmans were represented by Senior Counsels Abhishek M. Singhvi, Mahesh Jethmalani, Abhimanyu Bhandari, and Dayan Krishnan.

Mr. Singhvi argued that this was a proxy litigation, marking the fourth attempt to delay the AGM. The September ROC Order, Jabalpur litigation, Rashmi Saluja's own suit, and the current writ, all aimed at allowing Dr. Saluja to continue as the Chair of Religare beyond Feb 7, argued Singhvi.

It was submitted before the high court bench that Sapna Rao, currently in Bangkok, had failed to prove her Indian citizenship to file a writ under Article 19 of the Constitution.

All parties were instructed to file their replies, with the matter scheduled for February 18.

SEBI was also represented and stated that the Burman open offer should proceed, as they had returned Danny's letter.

Before the offer by Gaekwad became public, the independent directors of Religare Enterprises, on Jan. 23, flagged concerns over the open offer for the company's stake by the Burman family. The ongoing open offer of Rs 235 per share by M.B. Finmart Pvt., Puran Associates Ltd. and VIC Enterprises Ltd.—entities owned by the Burman family—was lower than the closing market price of Rs 271 on Sept. 22, 2023, a day before the announcement of the offer.

Furthermore, the directors also mentioned that the RBI approvals dated Dec. 9, 2024, given to Burmans regarding their open offer, were conditional in nature and mandated the Burman family entities to consolidate the non-banking financial companies within the Burman and Religare groups by March 31, 2026.

A detailed consolidation plan, supported by board resolutions, had to be submitted to the RBI within 90 days of the letter.

The directors submitted that non-compliance with the conditions set by the RBI could lead to dire regulatory consequences for the Burman family entities as well.