Proxy advisory firm InGovern Research has raised concerns over Religare Enterprises’ corporate governance and leadership credibility following the postponement of its annual general meeting (AGM). This comes amid ongoing regulatory investigations into executive chairperson Rashmi Saluja and a power struggle with its largest shareholder, the Burman family.
“The postponement of the Religare AGM raises significant concerns about governance, shareholder rights, and the overall stability of the company. The lack of a clear explanation for the delay has left shareholders feeling uneasy, prompting discussions about potential actions they may take in response,” InGovern said in its September report.
Religare has dismissed the report as “biased, motivated, and an attempt to tarnish the image of Religare’s present board and management.” The company’s spokesperson said that the report “suppresses material information,” as the issues are still “sub-judice” and accused InGovern of trying to influence the securities market.
Religare said that InGovern does not take responsibility for the accuracy of its analysis, which is “misleading and derogatory,” and damaging the organisation’s credibility and leadership.
The delay in holding the AGM has led to criticism from institutional investors, who speculate that the company may be trying to avoid a vote on Saluja’s reappointment. As the only non-independent director up for rotation in this AGM, Saluja’s leadership has come under scrutiny, especially at a time when the Burman family—who hold 26% in Religare—may move forward with an open offer to take a controlling interest in Religare.
“It is better for Saluja and the other key managerial personnel (involved in various regulatory probes) to be grateful and step down now itself to signal a commitment to accountability,” said Shriram Subramanian, founder and managing director of InGovern, adding that it is a “fait accompli” or an accomplished fact that shareholders may not approve Saluja’s re-appointment.
The proxy firm has recommended Religare’s shareholders use the tools at their disposal, “from voting at the AGM to engaging in public campaigns and legal action (if required),” the report said, pointing out the risks of the company failing to hold an AGM in December, the market regulator’s undisclosed show-cause notice in an alleged insider trading, and a potential vote out for Saluja.
The proxy firm’s call for shareholder awareness comes as Religare, particularly chairperson Saluja, faces heightened regulatory scrutiny from the Securities and Exchange Board of India (Sebi) and the Enforcement Directorate (ED) on allegations of insider trading, money laundering, and financial misconduct.