SEBI closes case against Religare, Rashmi Saluja for non-cooperation with Burman open offer

The Securities and Exchange Board of India (SEBI) has closed proceedings against Religare Enterprises Limited (REL), its former Executive Chairperson Rashmi Saluja and five directors over their alleged failure to cooperate with the Burman Group’s open offer for REL.

The markets regulator disposed of the interim order-cum-show cause notice issued on June 19, 2024 without passing any further directions.

SEBI noted that the open offer had since been completed and that the Burman Group had assumed control of REL. Therefore, the principal issue underlying the proceedings had already been resolved.

“Consequently, where the alleged irregularity has already been cured and the corrective steps have been fully implemented, the very object of a remedial direction stands satisfied,” the July 31 order said.

The proceedings were initiated against REL, Saluja and directors Malay Kumar Sinha, Hamid Ahmed, Praveen Kumar Tripathi, Ranjan Dwivedi and Preeti Madan.

The dispute arose after MB Finmart Private Limited, Puran Associates Private Limited, VIC Enterprises Private Limited and Milky Investment & Trading Company, collectively referred to as the Burman Group, announced an open offer for REL in September 2023.

The Burman Group, which then held 21.54 per cent in REL, proposed to acquire a further 26 per cent at ₹235 per share for a total consideration of about ₹2,116 crore.

Between October 2023 and June 2024, REL made several representations to SEBI objecting to the proposed offer and raising concerns about the acquirers. The Burman Group, in turn, complained to SEBI about the alleged absence of cooperation from REL.

SEBI subsequently asked REL to apply to the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (IRDAI) and SEBI for the regulatory approvals required to proceed with the offer.

However, REL maintained that SEBI lacked jurisdiction over the issue and that the Burman entities were not “fit and proper” persons. This prompted SEBI to issue its interim order alleging violations of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations and the Listing Obligations and Disclosure Requirements Regulations.

The interim order directed REL and the directors to furnish an undertaking that the company would apply for the necessary regulatory approvals, facilitate the Burman Group’s compliance with takeover regulations and constitute a committee of independent directors.

During the proceedings, 4 independent directors claimed that Saluja had misled them and dominated the REL board. Saluja disputed the allegations and maintained that the committee of independent directors functioned independently after obtaining legal advice.

SEBI declined to determine these competing claims. It said that the personal motives attributed to Saluja fell outside the scope of the proceedings and that the contentions did not require adjudication at this stage.

The regulator noted that the open offer was completed on February 13, 2025 and the post-offer advertisement was issued on February 18, 2025. The Burman entities thereafter assumed control and were reclassified as promoters of REL.

Relying on Securities Appellate Tribunal (SAT) rulings, SEBI stressed that directions under Sections 11 and 11B of the SEBI Act are preventive and remedial, rather than punitive.

Since all three directions contained in the interim order had been addressed and the open offer completed, SEBI concluded that no further directions were warranted.

[Read Order]