This marks the latest salvo in the battle between the Burmans and the Saluja-led Religare.
The Burmans alleged in a September 27 letter that Saluja is “unsuitable” for reappointment as non-executive chair of Care Health, citing recent actions against her by investigative and regulatory agencies. Care Health’s 17th annual general meeting is scheduled for Monday, and the reappointment is one of the key items on the agenda.
Saluja in ED, Sebi Glare
Religare owns 63% of Care Health, while private equity firm Kedaara holds 16% and employees hold 10%. The Burman family, Care, and Kedaara didn’t respond to ET’s queries. The Burmans—Dabur’s promoters, who hold about 26% of Religare Enterprises—have been pushing it to conduct an open offer for another 26% as mandated under the takeover rules. Saluja and the company management, after initially welcoming this in September last year, have been resisting the move, characterizing it as hostile.In their September 27 letter, the Burmans cited a first information report (FIR) registered against Saluja on September 6 by the Directorate of Enforcement (ED) on charges of criminal conspiracy and cheating, as well as an Enforcement Case Information Report under the Prevention of Money Laundering Act. They also cited a showcause notice by the Securities and Exchange Board of India (Sebi) over stock market transactions in alleged violation of insider trading rules.
In the letter, which ET has reviewed, the family cited a Care Health article that renders Saluja ineligible. “If any director or key management person is an unsuitable person, unless the promoter and the investor jointly agree otherwise in writing, they shall take all necessary steps to remove such an unsuitable person from their position,” according to the letter. The Burmans said an “unsuitable person” would be anyone facing prosecution by a government authority or a chargesheet not related to the company’s business for an offense involving imprisonment of more than six months, or someone who has committed fraud or other criminal acts. Such a person remains “unsuitable” until the chargesheet is set aside by a court or tribunal, the letter said.The Insurance Regulatory and Development Authority of India (IRDA) in July directed Care to buy back 7.57 million shares allotted to Saluja and levied a penalty of Rs 1 crore for failing to obtain prior approval for such remuneration. The Securities Appellate Tribunal later stayed the IRDA order for 12 weeks.
In the case filed with the Mumbai Police, the ED accused Saluja of getting a case registered against Dabur group chairman Mohit Burman and his family members “to derail” the proposed takeover of Religare and its subsidiaries, and obfuscate the detection of illegal gains accrued to Saluja through acquisition of Care Health stock options.
The ED found that Vaibhav Gawli, an office assistant at a pet café, was allegedly given Rs 2 lakh and directed to purchase 500 shares of Religare Enterprises worth Rs 1.20 lakh, to become a shareholder and eligible to file a complaint. The remaining Rs 80,000 was given to him for filing the police complaint against the Burman family, according to the FIR seen by ET.
The ED also accused Saluja and others of making “unlawful gains” of Rs 179.54 crore by acquiring Care Health stock options at a low price and by diverting Religare funds to subscribe to Care rights issues.
