New Delhi: In a new twist to the year-old saga of a bitter dispute between the Burman family—who own the fast moving consumer goods brand Dabur—and the top executives of Religare Enterprises Limited (REL) over the former’s bid to acquire a majority stake in the latter, Maharashtra Police have booked REL executive chairperson Rashmi Saluja among other top executives.
Based on the complaint of the Enforcement Directorate (ED), which has been probing a money laundering case related to Religare, the police have registered the case against Saluja, REL chief financial officer Nitin Aggarwal, general counsel Nishant Singhal, and shareholder Vaibhav Jalinder Gawali under 420 (cheating) and 120-B (criminal conspiracy) of the erstwhile Indian Penal Code at Mumbai’s Matunga police station.
The feud between the Burmans and the top REL executives started in September 2023, when four firms owned by the Burman family acquired an additional 5.27 percent stake in REL, triggering a mandatory open offer, since the family already possessed a 21.54 percent stake in REL.
According to the substantial acquisition of shares and takeovers guidelines of the Securities and Exchange Board of India (SEBI), any investor acquiring more than a 25 percent stake in any listed company triggers a mandatory open offer.
The Burmans initiated an open offer to acquire another 26 percent stake to consolidate their ownership over REL. But, a month later, the board of directors of Religare wrote a letter to SEBI, objecting to the open offer. They followed it up with 18 letters to oppose the takeover, saying that the Burmans were not ‘fit and proper’ to do so.
The SEBI, in its response, asked the REL executives to provide documents to support their allegation. The markets regulator also advised REL to comply with the open offer norms and complete processes related to the acquisition—such as seeking approvals from the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority (IRDA), and the SEBI—considering REL has licenses for functioning as a non-banking financial company, as well as, an insurance business.
REL has four business arms—Religare Finvest and Religare Housing Development Finance Corp are NBFCs, Care Health Insurance operates in the health insurance segment, and Religare Broking is a retail stock brokerage controlled by the conglomerate and listed on both stock exchanges.
With the REL still refusing to submit the applications for approvals, the SEBI set a hard deadline for the firm to complete the process—12 July 2024. The tiff did not end there as the Religare management challenged the SEBI order before the Securities Appellate Tribunal, which upheld the order and asked the firm to complete the approval process by 22 July.
Last month, the REL management reportedly submitted the applications.
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‘Bid to stop takeover by Burmans’
ThePrint has seen a copy of the ED complaint filed by an assistant director-level officer investigating the money laundering case. The case originated from a Mumbai police FIR based on complaint of one Religare shareholder Vaibhav Jalinder Gawali in November 2023. Gawali alleged that the former directors of Religare, Malvinder Mohan Singh and Shivinder Mohan Singh, in connivance with the Burman group, misappropriated REL assets.
The ED investigating officer alleged that when asked to provide documentary evidence to back the allegation, Gawali “categorically denied” having any documentary proof and, giving his statement to police on 12 August, said that he made the allegation on the directions of Dr Rashmi Saluja.
ThePrint also saw a copy of Gawali’s complaint, where he claimed to have purchased 500 shares of REL on 13 October 2023 at Rs 239 each, adding that he approached investigators out of legitimate concerns when the REL share prices started falling sharply.
However, now, the ED has claimed that Gawali has revealed that at least 15 days before the purchase of the shares, Saluja and other top REL executives handed him Rs 2 lakh, directing him to buy 500 shares of the company. While Gawali spent Rs 1.2 lakh on the share purchase, the rest—Rs 80,000—was allegedly for filing a police complaint against the former Religare directors and the Burman group.
Further, the ED has now alleged that Saluja also prepared a soft copy of the complaint that Gawali was supposed to lodge with the police. When police refused to register a case, she further guided him to approach an advocate at a local court, the ED has alleged.
“He (Gawali) further stated that the allegations made against the Burman family in his complaint filed at Matunga police station are not known to him, and these facts were mere reproduction of the facts stated in the papers handed by Dr Rashmi Saluja for filing complaints against Burman family,” the ED said. “When asked about the purpose behind the filing of the above-said complaint, Vaibhav Jalinder Gawali stated that according to his knowledge, this was done to stop the transfer of control of M/s REL to the Burman family.“
“Further, he was also aware that Dr Rashmi Saluja had been diverting funds in the form of ESOPS (employee stock ownership plan) from M/s REL and its subsidiaries. The purpose of the said complaint and the FIR was also to continue enjoying the said benefits, which might have been discontinued if Burmans had taken over the control of M/s REL,” it added.
The ED argued that the Prevention of Money Laundering Act investigation, so far, has corroborated Gawali’s statement of receiving funds from the REL’s top executives and his purchase of the company’s shares.
The agency, on 21 August 2024, raided the premises linked to Saluja and other top executives and seized several incriminating materials such as the details of the employee stock ownership plan (ESOP), the shares transferred from Care Health Insurance to Saluja, Aggarwal, and Singhal.
The agency, in the complaint to the Maharashtra Police, contended that the analysis of materials seized during its investigation suggested the motivation behind Gawali filing the complaint last November was to derail the takeover of the firm by the Burman group.
“Upon the preliminary analysis of the material collected during the investigation and perusal of statements recorded during the investigation, it appears that the FIR lodged in Matunga police station was motivated and based on apprehensions of a possible takeover of the group. The complainant lacked in-depth understanding of the facts pertaining to the case and was lodging the FIR without perusing any material evidence,” the agency said.
“As stated by him in his statement, he (Gawali) was given prepared material by senior officials of M/s REL to lodge the FIR. Further, the investigation revealed that the current officials of M/s REL would have an interest in lodging the FIR to derail the proposed takeover of the company and its subsidiaries to obfuscate the detection of illegal gains accrued to them through the acquisition of Employee Stock Options (ESOPs) of Care Health Insurance Limited (CHIL),” the agency further alleged.
(Edited by Madhurita Goswami)
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