Rashmi Saluja's acquisition in REL via ESOPs requires investigation: Burman family

The Burman family spokesperson on Wednesday issued a statement regarding the allotment of approximately 2.14 crore shares, constituting ~8% of Religare Finvest Limited (RFL), to Rashmi Saluja through Employee Stock Ownership Plans (ESOPs).

The largest shareholder of Religare Enterprises Limited (REL) has said that the matter requires investigation in terms of compliance with SEBI Takeover Regulations.

On Wednesday, ET had reported that a day after the Burman family announced an open offer to buy more shares to take control of the financial services conglomerate, Rashmi Saluja, executive chairperson of the company, acquired around 8% stake in its wholly-owned shadow bank Religare Finvest Limited (RFL), through an Employees Stock Option Plan (Esop) award.


"It is unfortunate that a solitary executive has cornered significant quantum of remuneration through ESOPs at Religare Enterprises Limited (REL), Care Health Insurance Limited, and RFL, all without approval and requisite disclosure to REL shareholders," the spokesperson said.

The Burman family also said that this raises question mark on the management and the independence of
the independent directors and their complicity in such unjustified dole outs.

"REL board should answer the shareholders whether there exist more instances of ESOP issuances to entities, and potential conflicts of interest," they added.

Further, the Burman family's spokesperson also remarked that these actions have eroded trust and confidence in the REL board, necessitating urgent need to restore credibility.

Rebutting this, REL, however, said that its Chairman Rashmi Saluja has not been issued any additional stock options of Religare Finvest.

The company in a statement said the approval sought at the AGM of RFL (Religare Finvest Ltd) held on September 26, 2023 was to seek enabling approval of shareholders for the proposed grant of ESOPs of RFL to Rashmi Saluja under the RFL ESOP Plan 2019.

The award in the unlisted subsidiary ascribed its value in a band of Rs 150-260 crore. Previously, proxy advisory firm InGovern had estimated the Esops awarded to Saluja in Religare Enterprises as well as its health insurance subsidiary Care Health Insurance to be worth Rs480 crore.

Together with the thus far undeclared award of stock options in Religare Finvest, the total compensation earned by Saluja via Esops could be between Rs630 and Rs740 crore. This is in addition to the annual salary and salary and places Saluja among the highest paid executives in Indian corporate history.

This stock award has become the latest flashpoint in the protracted battle of attrition that has broken out between the Burmans and the Religare board, led by Saluja, which has seen both sides approaching regulators against the other. Burmans, the billionaire promoters of FMCG major Dabur, are trying to gain control of Religare. The incumbent board, led by Saluja, is resisting.

While the board has written to regulators, as ET first reported on 9 November, arguing the Burmans were unfit to take over a conglomerate that possesses licenses to operate in regulated sectors such as housing finance, stock broking, health insurance and shadow banking, Burmans have accused Saluja of insider trading and abusing her position to gain excessive remuneration.

Burmans have denied the accusations and Saluja has denied insider trading and abusing her position to gain excessive remuneration. Burmans have denied the accusations and Saluja has denied insider trading allegations and said the remuneration was cleared by the board and all shareholders.