The Burman family, the promoters of FMCG major Dabur, said on Wednesday that the board of Religare Enterprises (REL) does not have the power or authority to reject its open offer. Further, the family is also confident of an “overwhelming” support from majority of the shareholders for the proposed transaction.
“It (the board) only has the power to recommend the open offer to the shareholders. Ultimately, it is for the shareholders to decide whether to tender the shares through the open offer or stay invested, post regulatory approvals…,” a spokesperson for the family said in a statement.
The family also said that the board had issued a press release dated September 25, welcoming its investment in REL.
The statement comes after a media report (by The Economic Times)quoted REL independent director Hamid Ahmed alleging that the timing of the open offer was “fishy”.
Ahmed, who is also the CEO of Hamdard Laboratories, had stated that the board had “rejected” the family’s open offer proposal, citing inferior merits and a move to replace both board members and management.
The open offer price, based on the SEBI takeover code, at Rs 221 per share and Rs 235 per share, were offered by the family is “at a premium”, the statement said.
The family also said that keeping the overall shareholder interest in mind, it will move “expeditiously” to close the transaction.
“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.
“It is a separate matter that the shareholders have already seen the governance lapses in REL,” it said, referring to alleged corporate governance lapses at the firm.
Earlier, proxy advisory firm Ingovern Research Services raised red flags against employee stock options issued to REL and its subsidiary Care Health Insurance’s chairperson Rashmi Saluja, terming them as “excessive remuneration”. It had also alleged REL of regulatory breaches, non-disclosures and keeping shareholders in the dark, and sought detailed probes by the regulators.
Last month, the Burman family had expressed its intention to raise its stake by 5.27% in Religare at Rs 235 per share, triggering an open offer. This was at a sharp discount to the then prevailing market price of Rs 270. Following which, allegations of “low price” for open offer was made by REL and Care Health Insurance’s chairperson Rashmi Saluja, while the Burmans accused her of insider trading.
On Wednesday, shares of REL closed down 0.87% at Rs 217.25 on the BSE.