The National Company Law Appellate Tribunal (NCLAT) has rejected Rashmi Saluja-led Religare Enterprises’ appeal seeking a stay on the Competition Commission of India’s (CCI) approval for the Burman family’s proposed acquisition of shares of the financial services group through an open offer.
Religare Enterprises (REL) had last month challenged the CCI approval before the appellate tribunal, alleging that the competition regulator did not follow due process. It also appealed to NCLAT to direct the Burman family to maintain the status quo in the shareholding of REL as of August 15, 2023.
In its order dated May 1, 2024, NCLAT members Justice Yogesh Khanna and Ajai Das Mehrotra rejected the stay appeal, stating that after reviewing the facts, they are of the opinion that, at this stage, no interference is warranted in the impugned order. The rest of the matter in REL’s petition is now listed for July 26.
CCI is a sector-agnostic regulator tasked with preserving and promoting competition in the country. Recognising that CCI had found that the proposed acquisition of REL by the Burman family was not likely to have any appreciable adverse effect on competition in India, the NCLAT, in its order, noted that the competition watchdog was “duty bound” to approve the proposed acquisition.
REL had contended that the CCI order dated January 23 be set aside and to direct CCI to investigate to determine if the acquirers have violated relevant provisions of law. An email query sent to REL did not elicit any response till press time Sunday.
The Burman family had, through various entities, accumulated a 21.5% stake in REL by August last year. In September, it bought another 5.27% stake, triggering a mandatory open offer to buy an extra 26% stake from the public. The open offer was made at ₹235 per share on September 25.
On October 18, independent directors of REL Enterprises wrote a letter to regulators including the Reserve Bank of India, Sebi and the insurance watchdog, levelling allegations of fraud and other breaches against the Burmans.
On October 26, entities controlled by the Burman family wrote to the board of REL seeking a probe into trades in the shares of the financial services firm by Saluja. Later, on November 8, the said complaint was sent to Sebi and the stock exchanges.
The Burman family have also alleged that the allotment of 8% of Religare Finvest (RFL) shares via employee stock ownership plans (ESOPs) to Saluja requires an investigation and stated that it is unfortunate that a solitary executive has cornered a significant quantum of remuneration through ESOPs at REL, Care Health Insurance, and RFL, all without approval and requisite disclosure to REL shareholders.
Both the Burmans and Saluja have denied any wrongdoing.
Source: Reuters.com