The Madhya Pradesh High Court has provided a temporary relief to Chairperson Rashmi Saluja amid a fight for the control of Religare Enterprises Ltd.
In an order on Dec. 18, the court halted an annual general meeting of Religare that was scheduled to take place on Dec. 31. A bench of Chief Justice Suresh Kumar Kait and Justice Vijay Kumar also stayed the Reserve Bank of India's approval of the Burman family's open offer, which would allow them to acquire a 26% stake in the company.
The order comes as a relief to Saluja as the decision on her reappointment has been delayed due to the court's intervention. The Burman family, which is the largest shareholder of the company, has been seeking to oust Saluja, raising questions about the future leadership and control of Religare.
The high court was hearing a public interest litigation filed by advocate Vijayant Mishra for protecting the interests of minority shareholders of Religare. Mishra argued that the proposed acquisition by the Burman family could lead to control being concentrated in the hands of a few, potentially undermining the interests of over 73,000 minority shareholders.
Religare Enterprises confirmed the court's stay in a filing to the BSE and the National Stock Exchange on Thursday, saying that the notice for the AGM would remain on hold until further orders.
The Burman family, through its entities, placed orders to acquire up to 1.73 crore equity shares, representing 5.27% of Religare's equity, at a maximum price of Rs 235 per share. This move is part of their strategy to surpass the 25% threshold, triggering an open offer obligation as required by regulations governing non-bank financial companies.
While the RBI had given approval for the increase in shareholding, it has withheld approval for the proposed appointment of four new directors at this stage.
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