Rashmi Saluja stopped the shareholder vote on her re-appointment at Religare Enterprises’ AGM, claiming her contract was only good until 2027–2028. Shareholders were shocked and governance concerns were raised when independent director PK Tripathi’s intervention failed to restart the voting.
At the company’s annual general meeting (AGM) on Friday, Rashmi Saluja, the chairman of Religare Enterprises Ltd., stunned both proxy advisory companies and shareholders by announcing that investors would not be able to vote on her continuing at this time because she was not resigning as a director.
Shareholders gathered to vote on three resolutions, including Resolution No. 2 on Saluja’s reappointment as a director, following the management’s opening remarks.
Religare provided the stock exchanges with a draft copy of the AGM proceedings, which Saluja stated: “[A]s per the 2nd resolution I don’t offer myself for re-appointment as I am not liable to retire by rotation.”
One of the four independent directors, P.K. Tripathi, stepped in at this moment to ask that the shareholders be given the right to vote.
Additionally, I want to say that the Board is dedicated to supporting the stakeholders as well as the management. According to the draft minutes, Tripathi stated, “Therefore, it is the responsibility of the Board to guarantee that the AGM is held and that the agenda for the AGM is discussed.” “The nutshell is the right of the stakeholders to exercise their vote on the agenda cannot be taken away.”
Given that numerous judicial appeals had been filed since December asking for a stay of the shareholder meeting, Saluja’s action was unexpected. The first was made by an investor before the Madhya Pradesh High Court’s Jabalpur bench, and the second was made by a different minority investor before the Delhi High Court. Lastly, Saluja filed a lawsuit against the business she leads, requesting that the Delhi High Court halt the AGM proceedings. Saluja faced the possibility of losing his position as a director of the corporation, which prompted all of these actions.
Saluja’s attorney had contended in the high court that the AGM agenda went against both the conditional Reserve Bank of India (RBI) consent granted on December 9, 2024, and her contractual tenure, which is secured until 2028.
However, no relief was provided by the courts.
Saluja, Tripathi, Malay Sinha, Ranjan Dwivedi, and Preeti Madan are among the five members of Religare’s board. Everybody is an independent director except Saluja.
“[I]t is a very, very important AGM for multiple reasons,” Saluja stated while presiding over the shareholder meeting from Religare’s Delhi office alongside the independent directors.
Investors had practically logged into the proceedings at the same moment. Saluja’s choice suggested that Religare’s shareholders would not be able to cast ballots on her reappointment on Friday. Nonetheless, between Tuesday and Thursday, the majority of investors used the electronic voting system to vote on the three resolutions.
According to Religare, the results of the vote will be revealed by Sunday night. Religare’s investors informed Mint on Tuesday that around one-third of them had voted against Saluja’s reappointment as director.
Saluja and Religare did not respond to emails.
“Her (Saluja) appointment as a director who departs by rotation was presented to shareholders in 2022 and 2023. It was authorized by shareholders. Therefore, I would like to know why she is protesting her reappointment this year,” asked Amit Tandon, the managing director and founder of the proxy advisory firm Institutional Investor Advisory Services (IiAS).
At shareholder meetings, Manendra Singh, a partner at the legal firm Economic Laws Practice, described the chairman’s responsibilities.
Before the meeting can begin doing business, the chairman is required by the Companies Act of 2013 to make sure that it is properly organized in conformity with the Act, the Articles, and any other applicable legislation. The meeting will then be run fairly and impartially by the chairperson, who will make sure that only the matters listed in the notice are discussed. In accordance with the Act’s requirements, the chairman would oversee how voting is handled at the meeting, Singh stated.
However, Singh pointed out that if the chairman is the party with an interest in any item of business, “without affecting his ability to vote on resolutions, he shall entrust the conduct of the proceedings in respect of such item to any non-interested director or to a member, with the consent of the members present, and resume the chair after that item of business has been transacted.”
However, the authority to control meetings does not specifically provide that a member’s right to vote on an agenda item may be taken away. Actually, no resolution that is put forth for e-voting can be withdrawn,” Singh continued.
Competing takeover
Digvijay “Danny” Gaekwad was ordered by the Supreme Court earlier on Friday to put ₹600 crore into an escrow account by February 12 in order to demonstrate the legitimacy of his counter-offer. On January 24, Gaekwad first put forth a counter-bid to the billionaire Burmans’ current open offer.
He made an offer to purchase up to 55% of the shares for ₹5,000 crore two days later. His letter was returned by the Securities and Exchange Board of India (Sebi), nonetheless, because it did not follow the takeover code’s exemption application guidelines. Gaekwad responded to this by submitting a petition to the Supreme Court on Thursday.
Sapna Govind Rao, an investor from Bangkok, also asked the Delhi High Court to step in and grant minority shareholders the opportunity to assess Gaekwad’s greater open offer. Rao was not granted any redress by the court.
According to Gaekwad, the Burman family’s offer of ₹235 per share is inferior than his offer of ₹275 per share to purchase up to 55% of Religare. He claimed that his financial resources were easily accessible in the letter to Sebi. He went on to say that, in contrast to the Burmans, his firm has no other non-banking financial company, allowing them to fully focus on Religare and provide funding.
Sebi was instructed by the Supreme Court to make a prompt decision regarding the legitimacy of the Burmans’ takeover timeline.
The Burmans originally announced their open offer to the public on October 4, 2023. Following a protracted delay, the Burman family, who own slightly more than 25% of Religare, received approval from all regulatory bodies and announced on January 18 that they would purchase up to 26% of the company’s shares from minority investors through an open offer that would begin on January 27.
The deadline was set for Friday, but after hearing Gaekwad’s appeal, the Supreme Court ruled that the Burmans’ open offer could not be closed until the Sebi made a decision regarding the validity of Gaekwad’s rival bid.
