The board of directors of Religare Enterprises (REL) backed executive chairperson Rashmi Saluja and the management of the group against charges of insider trading, terming they were raised by “certain people with vested interests”. It added that the financial services company market capitalisation has increased to about a billion dollars from under $100 million in March 2018.
Further, they denied the accusations made against REL’s entire management and board, which is committed to make the company “debt free” over the next five years.
In a stock exchange statement on Monday, REL board said that Saluja “categorically denies” that a representative of the Burman family informed her of the proposed open offer during a meeting on September 20. Further, on liquidation of her employee stock options (ESOPs), it said that the process was set in motion several days before the meeting.
“The actual sale of shares that happened on the September 21 and 22 was made at the prevalent market price. The share sale proceeds were utilised to further invest in ESOPs of a Religare Group entity,” it said, adding, exercising sale of listed stock options requires approvals which span several months before the actual sale.
The company’s share price has risen from Rs 17 in 2020 to Rs 280 in September 2023. “The ESOP perquisite value is also reflected of this significant value creation a part of which was also shared by her as a shareholder/Employee of the company,” the statement added.
Earlier, the Burman family had alleged Saluja of insider trading by selling shares of company immediately before the announcement of their open offer on September 25.
The management also refuted allegations of high salaries paid to Saluja. “The allegation that the executive chairperson draws a remuneration of more than Rs 150 crore per annum is completely false and erroneous,” and as per REL’s FY23 annual report, the remuneration of executive chairperson was Rs 8.12 crore.
It added that even after including the perquisites value of the ESOPs, it reached a figure of Rs 42.06 crore. Saluja’s remuneration, it said, was “performance-linked” and was approved by the Nomination and Remuneration Committee (NRC).
Talking about the ESOPs worth Rs 250 crore of Care Health Insurance, a subsidiary of REL, granted to Saluja, the management said the company has an ESOP pool of 12.5% of equity for its employees and another 2.50% for Religare Group employees.
“Saluja, as an employee of REL, was granted 22.711 million options (to purchase shares of Care) subject to terms and conditions of the scheme from the above-mentioned pool with an exercise price per option at Rs 45.32 per share in June 2022.”
The statement added that as per the terms, out of the above, 33.33% of the options would vest upon one year from the date of grant and issuance of minimum primary capital of Rs 250 crore by Care Health is completed. Further, two years from the date of grant and two years from the vesting commencement date, another 33.33% options would vest.
Supporting Saluja, the board also stated that REL’s story has been one of “resurgence” under the guidance of its board led by Saluja. “Religare is now at an inflexion point due to the tireless efforts of the last five years,” it said, adding, REL has now grown into a leading financial services player.
Earlier on November 15, proxy advisory firm Ingovern Research Services raised red flags against ESOPs worth Rs 480 crore issued to Saluja, terming them as “excessive remuneration”. It had also alleged REL of regulatory breaches, non-disclosures and keeping shareholders in the dark, and sought for detailed probes by the regulators.