Religare-Dabur battle: What is in store next?

Religare Enterprises has been listed on the stock exchanges for more than 15 years, and its journey has been eventful, to say the least, and not just in terms of the movement of its stock price.

The financial services company is currently locked in a bitter battle with the Burman family of Dabur, with allegations flying thick and fast. The Burmans have declared their intention to get a majority stake by way of an open offer—the family is already the single-largest shareholder with a 26.51 per cent stake—announced in September.

The company’s independent directors have complained to regulatory bodies, accusing the Burmans of committing fraud—even alleging that they colluded with former promoters Malvinder Singh and Shivinder Singh. The Singh brothers were barred from the capital markets and restrained from being associated with any listed entity as key managerial personnel, or KMPs, just last year because a Sebi probe found that funds had been diverted for the benefit of the erstwhile promoters.

Incidentally, the allegations come less than two months after the company informed the stock exchanges that the acquirers “have had an impeccable reputation and exemplary standing in the industry over these years”, adding that the Burmans have “wholehearted support”.

The Burmans have their own set of complaints. They have accused Chairperson Rashmi Saluja of selling shares after a meeting with representatives of the Burman family, where she was apprised of the plans for the open offer. Both sides have vehemently denied the allegations, and the company has said that Saluja’s share sale was a part of ESOPs and required approvals that take months.

The bourses have asked Religare to issue clarifications on the controversy. Sebi, meanwhile, has written to the Reserve Bank of India and Irdai seeking certain details regarding the company. As things stand, this promises to be yet another battle where corporate governance standards will be tested to the hilt.

@ashishrukhaiyar