InGovern Flags Lapses in Governance at Religare

Questions Dual Role of Former Care Health Independent Director

- SAMIE MODAK

InGovern Research Services has flagged concerns over potential governance lapses at Religare Enterprises (REL) over an undeclared conflict of interest at its health insurance arm, Care Health Insurance (CHIL), and the continued opacity around the claw-back of employee stock ownership plans (ESOPs) granted to former chairperson Rashmi Saluja.

InGovern says Pratap Venugopal's "dual role"—he was simultaneously REL's external legal counsel and an independent director of CHIL—"raises fundamental governance questions."

The firm argues that the arrangement compromised the independence of REL's nomination and remuneration committee, and that disclosures on the conflict appear to be "not transparently" disclosed.

CHIL had filed an appeal before the Securities Appellate Tribunal under instructions from Saluja, who was then the non-executive chairperson of the board of directors of the firm. Subsequent to Saluja's removal from the board, the company decided to withdraw the appeal. "We offer no further comments as these issues are being examined internally," REL said in an email response.

Last month, the Enforcement Directorate summoned Venugopal in connection with the ESOP transactions. The summons were later withdrawn after protests from the legal fraternity.