Religare Seeks Funding from Burman Group

New Delhi, Mar 17 (PTI) Religare Enterprises Ltd (REL) on Monday said its board has asked the new promoter Burman family to provide immediate funding support to sustain operations.

The board of Religare has commissioned a governance review of REL and its subsidiaries, namely, Religare Finvest Limited (RFL) and Religare Housing Development Finance Corporation Limited (RHDFCL), the financial services firm said in a regulatory filing.

The objective is to review the past operating practices, suggest improvements around systems and controls for future implementation and identify any potential instances of misconduct by certain current and/or ex-employees of the aforementioned companies, it said.

In addition, the board has reviewed the fund flow position of the company and observed a cash flow gap over the next few months.

After examining the various options, the board has unanimously decided to approach the new promoters, the Burman Group, for immediate funding support to sustain the operations of the company, it said.

To address the funding requirements, the board has recommended a short-term Inter Corporate Loan (ICL) from the promoter group or its associate entities in the interim shall be best suited given the tight timeline for the requirement, it said.

The filing however did not disclose the exact amount of funds required for smooth operations.

Burmans, through four entities -- Finmart Pvt Ltd, Puran Associates Pvt Ltd, VIC Enterprises Pvt Ltd, and Milky Investment & Trading Company -- have a controlling stake in REL.

The collective stake of these entities increased to 25.16 per cent in REL last month. Following this, Burman family-controlled financial services firm approved the appointment of four directors -- Abhay Kumar Agarwal, Arjun Lamba, Gurumurthy Ramanathan and Suresh Mahalingam.