In a regulatory filing, REL posted a letter written by Danny Gaekwad Developments & Investments addressed to SEBI Chairperson, requesting for grant of exemption from strict enforcement of Substantial Acquisition of Shares and Takeovers (SAST) Regulations
New Delhi: US-based entity Danny Gaekwad Developments & Investments on Monday urged capital market regulator SEBI to reconsider its proposal for a competing open offer proposal for Religare Enterprises Ltd (REL), the holding company of Care Health Insurance.
In a regulatory filing, REL posted a letter written by Danny Gaekwad Developments & Investments addressed to SEBI Chairperson, requesting for grant of exemption from strict enforcement of Substantial Acquisition of Shares and Takeovers (SAST) Regulations.
In the letter dated February 1, it has requested the Securities and Exchange Board of India (SEBI) to allow the company to make a public announcement for competing offer in relation to Burmans’ open offer under regulation 20 of the SAST regulations.
It also urged SEBI to issue a direction to keep Burmans’ open offer in abeyance so that the public shareholders are able to tender their shares in both, the Burmans’ open offer as well as their proposed competing offer.
Besides, the entity requested the RBI to establish an escrow account with a scheduled commercial bank for the purposes of the competing open offer wherein ₹60 crore would be deposited.
It also requested RBI Governor to provide an unconditional, irrevocable and on demand bank guarantee in favour of the manager to competing offer from a scheduled commercial bank for an amount of ₹540 crore.
The request comes days after SEBI rejected the competing open offer made by Danny Gaekwad Developments & Investments.
Digvijay Laxmansinh Gaekwad, who claimed to be a globally recognised investor, has offered to pay a 17% higher price of ₹275 per share of REL as against open offer price bid of ₹235 per equity.
Burmans’ Religare Enterprises’ open offer to acquire an additional 26% stake from the open market commenced on January 27 following the regulatory approvals.
The open offer is for the acquisition of up to 9,00,42,541 fully paid-up equity shares of face value of ₹10 each, representing 26% of the expanded voting share capital of REL from the public shareholders.
Finmart Private Ltd, Puran Associates Private Ltd, VIC Enterprises Private Ltd and Milky Investment & Trading Company.
Following the open offer, Burman’s stake in REL would rise to 53.94%, while Digvijay Laxmansinh Gaekwad proposes to pick 55% stake in the company.
The Reserve Bank in December approved the open offer of the Burman family — the promoters of FMCG major Dabur — to acquire an additional 26% stake in NBFC firm Religare Enterprises Ltd (REL).
As of September 30, 2024, Burmans, through its four entities, collectively owns a 25.12% stake in REL.
The Burman family — a promoter of Dabur India and other entities such as Eveready Industries — through its entities, in September 2023 announced a ₹2,116-crore open offer to REL shareholders to acquire up to 26% stake in the company.
Soon after the open offer bid, Burmans complained to capital market regulator SEBI for violation of insider trading rules by the chairperson and appointment of board of her choice.
However, it was contested by REL independent directors, who raised red flags alleging fraud and other breaches by Burman family entities and approached regulators, including markets regulator SEBI, the RBI, and the Insurance Regulatory and Development Authority.
Meanwhile, three leading proxy firms stakeholders Empowerment Services (SES), Institutional Investor Advisory Services (IiAS), and InGovern Research have issued voting recommendations on the three resolutions floated by the financial services firm and has advised investors to vote against the re-appointment of Rashmi Saluja as director on the board of Religare Enterprises (REL), citing corporate governance concerns.
Fifty-year-old Saluja is liable to retire by rotation unless reappointed again at the upcoming AGM, which was originally slated for December.
Religare Enterprises has denied the allegations made by proxy advisory firms its chairperson Rashmi Saluja.
Investors will vote on various proposals of the company from Tuesday and results are expected at the AGM on February 7.
“We strongly reject these proxy advisory reports which demonstrate a concerning pattern of publishing unverified, misleading information without seeking any clarification from REL’s management,” said the company’s spokesperson in a statement.