Madhya Pradesh High Court Clears Path For Religare’s AGM
The case that has now been disposed by the high court was filed as a PIL for 'protecting the interests' of minority shareholders of Religare.
The Madhya Pradesh High Court on Thursday disposed of a case that led to a stay on Religare Enterprises Ltd.'s annual general meeting. The allows the previously halted AGM to proceed.
As a result, Burman family's open offer, which would allow them to acquire a 26% stake in the company, can also go through.
Last month, the high court halted Religare's AGM that was scheduled to take place on Dec. 31. A bench of Chief Justice Suresh Kumar Kait and Justice Vivek Jain had also stayed the Reserve Bank of India's approval of the Burman family's open offer.
The high court's disposal comes as a setback to the company's Executive Chairperson Rashmi Saluja, as the decision on her reappointment can now move ahead. As the only non-independent director, her position requires re-appointment at each AGM.
The Burman family, which is the largest shareholder in the company, has been seeking to oust Saluja, raising questions about the future leadership and control of Religare.
The case that has now been disposed was filed as a public interest litigation for "protecting the interests" of minority shareholders of Religare. It was 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.
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 seen part of the strategy to surpass the 25% threshold, triggering an open offer obligation as required by regulations governing non-bank financial companies.
Shares of Religare were trading 3.5% higher at Rs 291.25 apiece on the BSE, compared to a 0.71% decline in the benchmark Sensex at 1:58 p.m.
