The Securities and Exchange Board of India on Wednesday asked Religare Enterprises Ltd. to make way to let the Burman family buy more shares in the financial services company.
The regulator also directed the company to facilitate the Burman Group in fulfilling their obligations under the SEBI Takeover Regulations, 2011. This includes providing necessary cooperation and support to ensure the open offer process proceeds smoothly.
Additionally, REL has been directed to immediately constitute a committee of independent directors, if not already in place.
The Burman family, known for leading consumer goods giant Dabur India, recently upped their stake in Religare to nearly 25%. Thereafter, it placed orders through JM Financial Services Ltd. to acquire up to 1,73,15,874 equity shares, constituting 5.27% of the equity share capital, at a maximum price of Rs 235 per share on any recognised Indian stock exchange.
Due to Religare's status as a non-banking financial company, this move depended on obtaining approvals from regulatory authorities, which would have propelled their shareholding beyond the 25% threshold, thereby triggering the open offer obligation.
However, Religare Enterprises filed a writ petition before the Delhi High Court, seeking a forensic investigation into the Burman Group's acquisition process. The company expressed concerns about the compliance and suitability of the acquirers under the "fit and proper" criteria.
SEBI observed that the Burman family had made a public announcement for acquisition of shares on Sept. 25, 2023, i.e., almost nine months back. While they have repeatedly followed up with Religare to obtain the required approvals (failing which the open offer cannot proceed), they did not receive appropriate cooperation.
Since the open offer obligations have consequently given rise to shareholders' right to have an exit option, any further delay is likely to negatively impact the rights of the shareholders, the board noted.
However, since the company, even after explicit advice from SEBI, refused to take appropriate step for making applications to regulators for statutory approvals, urgent directions were issued.
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