Sebi ropes in Irdai on Rashmi Saluja's Care Health Esops

Rashmi Saluja chairs both Religare Enterprises and its insurance unit.
Rashmi Saluja chairs both Religare Enterprises and its insurance unit.


  • Depending on the outcome of its probe into the issue of the stock options, Sebi will set out the observations or conditions for approving the Burmans’ open offer, the letter said

The battle for Religare Enterprises Ltd (REL) has taken a new turn, with the market regulator seeking the views of its insurance counterpart on REL’s insurance unit issuing hefty stock options to Rashmi Saluja, who chairs both companies.

On 4 January, the Securities and Exchange Board of India (Sebi) wrote to the Insurance Regulatory and Development Authority of India (Irdai) for its detailed views and comments on the grant of Care Health Insurance Ltd stock options to Saluja. The letter from Sebi’s corporate finance department stated the matter is of high importance given the amount involved for incentivizing a single employee; and the Burman family’s planned takeover of Religare.


Depending on the outcome of its probe into the issue of the stock options, Sebi will set out the observations or conditions for approving the Burmans’ open offer, the letter said.


According to InGovern Research, a proxy advisor, Saluja’s overall compensation may be close to 700 crore, including employee stock options (Esops) of Religare and Care Health totalling 480 crore; Religare Finvest Esops worth 150-200 crore; and a salary of 42 crore. The stock options became the centre of a controversy after the Burman family, which has mounted an open offer for Religare, unleashed withering criticism on Saluja and Religare over the matter. The Burman family, which now controls over 25% in Religare, had criticized Saluja for drawing “excessive" compensation and called for regulatory intervention. The Religare board and Saluja have rejected all allegations of impropriety. In a statement on 20 November, the Religare board said that the issue of Esops was “in full conformity with the guidelines of the insurance regulator applicable to insurance companies".

“You are requested to provide comments on the same interns of the stated Act and the regulations of Irdai at the earliest, so as to enable us to process the draft letter of offer... The information may be shared on a regulator to regulator basis," the letter said.

In January, the dispute worsened after the Burmans cried foul over REL subsidiary Religare Finvest Ltd granting stock options worth 150-200 crore totalling an 8% stake to Saluja.

Saluja has been credited with turning around the fortunes of Care Health after she took over as chairperson of the fraud-hit Religare group. Its premium income has grown fivefold during the period, making it the country’s second largest stand-alone health insurer. It underwrote a direct gross premium income of over 5,479.38 crore during the April-January period of this fiscal, compared to 4,138.74 crore in the same period last year, a 32.39% jump.

InGovern had claimed last year that Care Health had issued the Esops to Saluja despite Irdai’s objection.

Emails seeking comment sent to Sebi, Irda, Religare, the Burmans and Saluja did not elicit any response.

Irdai’s response will decide Sebi’s view on the open offer, two people aware of the matter said, adding Religare has submitted its answers and documents related to options grants, and details of shareholders’ approval.

On 27 November, Mint reported on Irdai summoning Anuj Gulati and Anoop Singh of Care Health to question them about the stock options issued to them despite its objections.

In its letter, Sebi said Religare has claimed that shareholders of Care Health and Religare had approved the options grant on 19 September and 23 September, 2022, respectively.

According to Religare’s submission cited by Sebi, “the Esops were granted to Dr. Rashmi Saluja under the Employee stock Option Scheme 2014 of Care Health (erstwhile Religare Health Insurance Company Ltd.). The same was approved by the shareholders of Care Health on 25 July, 2014 and its amendments were approved by the shareholders on 28 July 2018, 6 November 2018 and 27 September 2021".

On 13 June 2022, at least 22.71 million shares of Care Health worth 102.93 crore were granted to Saluja with the approval of the remuneration committee. And, on 4 October 2023, at least 7.57 million shares of Care Health worth 39.43 crore (including tax) were allotted to Saluja. The Burmans have argued that such remuneration puts a question mark on the management, and the complicity of independent directors.

“The Esop pool of Care Health was approved by the shareholders of Care Health to be increased from 12.5% to 15%, with the additional 2.5% being allocated for employees of REL—this was approved vide the special resolution passed by shareholders of Care Health on 27 September 2021," Religare stated in its response to Sebi.

Religare said the Care Health Esops were duly approved by one Trishikhar Ventures Llp (a 16.2% shareholder of Care Health, who has certain restrictive covenants under its shareholders’ agreement governing Care Health, which are also incorporated in the articles of association of Care Health).

Additionally, Care Health, according to Religare, had also obtained legal opinion on the Esop issue to Saluja, which was disclosed to shareholders of Care Health on 19 September 2022, where they approved the Esops grant, says the Sebi letter to Irdai.

The Burman family, which made an open offer for Religare in September, recently raised its stake to over 25%, which triggers an open offer as per the country’s takeover code. The Saluja-led board has opposed the takeover. While the Burmans have criticized Saluja’s remuneration and transactions, the Religare board has contended before Sebi that the Burmans were “unfit" to take over as Religare’s promoters, and that the open offer price is low.

Sebi is conducting a separate probe into any potential breach of insider trading norms by Saluja since the Burmans have claimed that Saluja transacted unfairly on 21 and 22 September in Religare shares worth 34.71 crore while being in possession of unpublished price-sensitive information regarding the Burmans’ open offer announcement that was due on 25 September then. Mint reported this on 9 January. The Burmans, who lead consumer goods giant Dabur Ltd, have called it an insider trade and sought regulatory action, while Religare has said the sale was planned earlier. After selling REL shares, Saluja currently holds 1.42% in the company.

In another letter dated 20 December, the regulator sought wide-ranging information from both Religare and the Burman entities on all the events leading up to the open offer and after.

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