| In Short |
| Maharashtra Police charge REL chairperson Rashmi Saluja and others with cheating and conspiracy based on ED complaint. |
| The charges are linked to the Burman family’s attempt to acquire a majority stake in Religare. |
| ED alleges that REL executives orchestrated a false complaint to block the Burman takeover. |
| The dispute highlights the high-stakes battle over control of REL and its subsidiaries. |
In an unprecedented escalation in the ongoing tussle for control between the Burman family, promoters of the Dabur brand, and the top management of Religare Enterprises Limited, the Maharashtra Police have filed charges of cheating and criminal conspiracy against REL’s executive chairperson Rashmi Saluja and three other executives. The charges, based on a complaint by the Enforcement Directorate, underscore the deepening chasm over the Burman family’s failed bid to gain a controlling interest in REL.
The Dispute: Burmans vs. Religare Executives
The conflict began in September 2023 when the Burman family, which currently owns 21.54% in REL, picked up an additional 5.27%. This automatically triggered an open offer under the SEBI guideline that requires any investor crossing a 25% stake in a listed company to make an open offer for an additional 26% stake. The Burmans thus made a bid to consolidate their holding in REL. However, this was met with stiff resistance by the management of REL, spearheaded by Rashmi Saluja.
The board of directors of REL filed a spate of objections stating that the Burmans were not “fit and proper” to take over the company. Despite such accusations, SEBI instructed REL to comply with the open offer norms as well as to get approvals from the respective regulatory bodies: the RBI, IRDA, and SEBI.
The ED Complaint and Police Charges
Things took a legal turn when the ED, investigating a money laundering case pertaining to Religare, filed a complaint with accusations of Saluja and other executives manipulating the process to prevent the Burmans from taking control of REL. The complaint also accuses the executives in REL of orchestrating a scheme involving a shareholder named Vaibhav Jalinder Gawali, who was allegedly paid for purchasing REL shares and filing a false police complaint against the Burman family.
According to ED, Gawali’s complaint was frivolous, at the instance of instructions from Saluja and other officials of REL, with the object of thwarting the Burman takeover. Gawali himself admitted that prepared material was provided by the REL executives to him to file the FIR and which he later admitted to be unfounded.
The probe by ED goes a step further to indicate that such FIR was filed not only to block the Burmans but also to save the skin of the top executives of REL with a view to maintaining their personal financial interest in the company. ED has linked these actions with the manipulation of ESOPs in REL and its subsidiaries, which could have been threatened by the Burman’s potential control over the firm.
Broader Implications and Future Developments
The charges against Rashmi Saluja, among other top REL executives, have been an entirely new dimension to the Burman-Religare fight. With the legal battles still proceeding, the decision may well determine the fate of REL and its diverse arms, including its NBFCs and health insurance unit.
The case also illustrates how corporate takeovers in India are fundamentally multi-dimensional-a delicate interplay between regulatory compliance, legal maneuvering, and boardroom strategies in a high-stakes fight for corporate power. But with the Burmans pushing on for control and the current management of REL fighting back with all resources they can muster, it’s still a dicey affair to predict where this dispute would finally settle.
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