THE BATTLE - FOR RELIGARE

THE BURMAN FAMILY AND THE RELIGARE MANAGEMENT HAVE BEEN ENGAGED IN A LONG, BRUISING BATTLE FOR CONTROL OF THE ₹6.300-CRORE RELIGARE ENTERPRISES. WITH REGULATORS STEPPING IN NOW, WHAT LIES AHEAD?

- HARDIK CHHABRA

WILL YOU, WON'T you, will you clear the way, Religare?

The question sums up the Securities and Exchange Board of India’s interim order-cum-show-cause notice that the securities market watchdog posted on its website on June 19. The trigger: the reluctance of the ₹6,300-crore Religare Enterprises Ltd (REL), a listed company, to get the paperwork done for the Burmans of Dabur to wrap up the open offer they made to its shareholders in September last year.

Sebi wants to know why Religare is not getting the clearances required from the regulators that govern its various businesses for the open offer to proceed and why it has ignored Sebi’s “explicit” advice. The Burmans’ open offer requires “a logical conclusion,” Sebi says, after listing every recorded step in the nine-month saga and Religare’s failure to back its charges against the Burmans.

Sebi’s 12-page document, over 4,400 words long, says Religare must promise to apply for clearances to the regulators concerned on or before July 12, 2024, or Sebi will restrain Religare from accessing the securities market. Religare is a diversified financial services company that operates in retail stockbroking, health insurance, and lending to small and medium businesses, among others. REL is registered as an NBFC with the Reserve Bank of India.

On July 10, the Securities Appellate Tribunal (SAT) directed Religare to file the necessary open offer application with “regulatory authorities including RBI to comply with the directions” contained in Sebi’s interim order. An extension of time was granted till July 22 to submit this application. SAT has also given an interim stay on the show-cause notice issued to REL’s top management and provided relief till the next hearing on August 29. This was after REL moved SAT seeking relief from Sebi’s order.