"CCI Inquires About Burman Family's Role and Merger Intentions at Religare Enterprises"
The Competition Commission of India (CCI), India's regulatory body for competition, has reportedly reached out to Religare Enterprises for details concerning the Burman family. This includes inquiries into whether the family sought a potential merger involving the company, expressed interest in participating in its management, or aimed to secure representation on its board. Notably, the Burman family holds the largest share in Religare Enterprises.
CCI has requested all correspondence and documents exchanged between the Burmans and Religare from October 13, 2017, to September 25, 2023. This period is significant as it aligns with the time when the promoters acquired shares in Religare Enterprises.
The regulatory body notes that the Burmans did not initially disclose their acquisition of Religare shares. However, they are currently seeking approval for purchasing an additional 5% stake through secondary market transactions. Moreover, they are planning an open offer to acquire 26% from the company's public shareholders.
Religare reportedly denies direct communication with the Burmans regarding a potential merger or involvement in the company's management. Nonetheless, the company observes the Burmans' actions as indicative of an intention to take control of the financial services unit. Religare asserts that the initial share acquisitions, along with the proposed stake purchases and open offer, are interrelated.
During their initial investment in 2018, the Burmans acquired a 10% stake in the company through the subscription of share warrants. Subsequently, they converted this into equity and increased their ownership to 14%, eventually raising it to 22%. Following this, they proposed the acquisition of an additional 5% of Religare shares from the secondary market, coupled with an open offer for an extra 26% stake. According to reports, Religare accused the Burmans of artificially segmenting specific steps of their fourth acquisition, allegedly bypassing the necessity of obtaining approval from the CCI.
Amid an ongoing dispute between the Burman family and Religare, reports surfaced of the CCI seeking information related to the Burmans. Independent directors of Religare Enterprises accused the Burmans of fraud and other regulatory breaches, lodging complaints with SEBI, IRDAI, and RBI. Allegations include claims of the Burmans significantly violating regulatory obligations. SEBI requested REL to furnish evidence supporting these claims. However, the Burman family refuted these allegations.
In a surprising turn, the Burman family reached out to SEBI and the stock exchanges, urging an investigation into the trading activities of Religare Enterprises' Chairperson, Rashmi Saluja. Four entities under the Burman family alleged that Saluja sold a portion of her personal holdings in the company shortly after meeting with a Burman representative.
