Burman Family: REL Board Can't Reject Open Offer

New Delhi, Nov 29 (PTI) Burman family, which is locked in a battle with the management of Religare Enterprises Ltd (REL) for takeover of the company said that the board of the NBFC does not have the "power or authority" to reject their open offer to pick up controlling stake.

"It only has the power to recommend the Open Offer to the shareholders," the Burman family spokesperson said in a statement.

It is a separate matter, that the shareholders have already seen the governance lapses in REL and whether the directors can be said to be discharging their duties correctly, it said, adding, it is for the shareholders to decide whether to tender the shares in the open offer, or stay invested.

"In fact, the board issued a press release dated September 25, 2023 welcoming our investment in REL. The Open Offer price is calculated as per the formula provided in the SEBI Takeover Regulations. As per this formula, the calculation comes to around Rs 221," it said.

The open offer price of Rs 235, is at a premium to that price.

"Keeping the overall shareholder interest in mind, we will move towards closing the transaction expeditiously working with all the regulators. Given our credentials, an overwhelming majority of the shareholders are supportive of the proposed transaction and we remain confident that under our guidance, REL's performance would see significant uptrends," it said.

The statement comes after Hamid Ahmed, an independent director at Religare Enterprises and CEO of Hamdard Laboratories, has criticised the timing of the Burman family's open offer to acquire more shares in the financial services company.

Ahmed emphasied that the board has unanimously rejected the offer, citing its inferior merits and a proposal to replace both board members and management.

Entities controlled by the Burman family -- promoters of FMCG major Dabur -- have written to the Securities and Exchange Board of India (Sebi) and stock exchanges that REL Chairperson Rashmi Saluja sold a portion of her personal holdings in Religare Enterprises Ltd a day after meeting a representative of the Burmans on September 20.

Independent directors of the REL have raised red flags alleging fraud and other breaches by Burman family entities and had regulators including Sebi, the Reserve Bank of India and the Insurance Regulatory and Development Authority.