The firm said in its communication to the Securities and Exchange Board of India (Sebi), Reserve Bank of India, and the Insurance Regulatory and Development Authority of India (IRDAI), that it would proceed with seeking their approval after the regulators give their decisions on the alleged violations by the Burmans.
The Burmans’ plan to take greater control of Religare did not go through after the RBI rejected their application seeking permission to acquire control or change in management of the company. The central bank advised them that the target company must submit the application seeking these permissions.
The Burman family, who own consumer giant Dabur, sought the regulators’ intervention in the matter, alleging they faced a “complete absence of cooperation and support” from Religare about acquiring certain information to complete the applications necessary to obtain regulatory approvals.
A final decision by RBI, Sebi, IRDAI, and the Competition Commission of India (CCI) has a “direct bearing on the suitability” of the Burmans to take control of Religare and through it, the group companies engaged in various lines of regulated financial business, according to the letter by Religare to all the regulators.
Religare declined to comment.”As we understand, the banking regulator has taken note of the non-cooperation by Religare to make the necessary applications … the law requires that once the process for the open offer is initiated, the company is bound to follow the process of filing the requisite application with the respective regulators. As on date, there is no such disclosure on the stock exchanges that explains these actions,” a Burman family spokesperson said.”This delay is not only detrimental to the shareholders’ interest but also goes against the fiduciary duty of the board under the law to provide relevant information to process the open offer, which provides an opportunity to the shareholders to exercise their right,” the spokesperson added.
While the approval for the deal is pending before RBI, Sebi, and IRDAI, the CCI gave its nod on January 23.
Religare’s letter, however, pointed out that though CCI has approved the Burmans’ acquisition of the company’s shares, the approval is linked to “certain proceedings” initiated by the regulator. The CCI is examining whether the Burmans have made false statements or omitted furnishing material information to it.
“These matters are still open and outstanding,” Religare said.
Soon after the CCI nod, Burmans hiked their stake in Religare to 25.18% from 21.18%. This new shareholding level gives the Burmans the right to block special resolutions at Religare and make an open offer for an additional 26% to the company’s public shareholders.
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