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Religare’s new chapter: Saluja out, new interim chairperson takes charge
PK Tripathi has been appointed as the interim chair of Religare Enterprises following Rashmi Saluja's ouster, confirmed by RBI. The board will rotate chairperson duties among independent directors until a new executive director is selected. Regulatory approvals are underway amidst ongoing changes.
Mumbai: An 18-month public spat over control of Religare Enterprises Ltd (REL) finally ended on Thursday with the company confirming chairperson Rashmi Saluja’s ouster and the appointment of an interim chairman in independent director Praveen Kumar Tripathi.
That, and US-based businessman Digvijay ‘Danny’ Gaekwad’s failure to submit ₹600 crore in an escrow account by 2 pm on Thursday—as directed by India’s top court—effectively means the Burman family’s open offer for the New Delhi-based financial services company stands firm.
India’s central bank clarified to Religare in a letter on Thursday that Saluja cannot continue further as a director, the company informed the stock exchanges. The filing said Saluja would no longer serve in her role following the results of the 40th annual general meeting (AGM) held on 7 February 2025.
“As per the report of the scrutinizer, the number of votes cast against the resolution was 97%.... Accordingly, Rashmi Saluja, Executive Chairperson of the Company, ceases to be the Director of the Company,” the exchange filing stated.
The company added in the filing that at its meeting held on 11 February, Religare’s board appointed Tripathi as the chairperson until 30 June.
The new chairman
Tripathi told Mint on a phone call on Thursday that the company’s four independent directors—Tripathi himself, Malay Kumar Sinha, Ranjan Dwivedi, and Preeti Madan—would serve as chairperson by rotation.
At the same time, day-to-day administration of the company would be overseen by a new six-member executive committee comprising members from Religare and its subsidiaries, Tripathi added.
“I will be the chair for four months as a non-executive independent director followed by other independent directors in rotation till we find a suitable candidate for the post of executive director,” Tripathi said.
As per Sebi’s listing norms, where the chairperson of the board of directors is a non-executive director, at least one-third of the board of directors shall comprise independent directors. And where a listed entity does not have a regular non-executive chairperson, at least half the board of directors shall comprise of independent directors.
Tripathi said the board members are currently deliberating on the necessary statutory disclosures that need to be made to the stock exchanges and are taking steps to secure approvals from market regulator Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI).
Shriram Subramanian, founder and managing director of proxy advisory firm InGovern Research Services Ltd. said, “Either of the independent directors or a committee of independent directors or a KMP (key management personnel, appointed by the IDs) can take the role of interim CEO till a full-time person as CEO or MD is selected by the board. One of the independent directors will assume charge as chairman of the board during board meetings,” he said.
RBI’s clarification
The company had earlier sought a clarification from RBI regarding the applicability of regulatory requirements, particularly in relation to the change in its management.
Also read | Inform regulators of Saluja's cessation as chairperson, Religare board tells company secretary
On the basis of a 9 December letter regarding a conditional approval by RBI to the Burman family’s open offer, Saluja had filed a petition in the Delhi High court last week arguing that she cannot be removed from the company’s management as a director due to the RBI’s directions mentioned in the 9 December letter.
But RBI’s response on 13 February confirmed that Saluja’s exit is in accordance with the regulatory framework, Religare’s exchange filing said.
Religare Enterprises is a non-banking finance company and is governed by both RBI and Sebi regulations, as it is listed on the stock exchanges.
According to the RBI’s Master Directions, prior approval is required for any changes in the management of the company that result in a change of more than 30% of the directors, excluding independent directors. However, the clarification from the RBI indicated no further regulatory steps are required in this instance.
While the company’s filing noted that no new appointments or reappointments have been made in connection with Saluja’s departure, Tripathi told Mint that a candidate would be identified in due course, in consultation with RBI as required by law.
Queries sent to Religare and the Burman family remained unanswered till press time.
Danny Gaekwad’s offer
Meanwhile, US-based businessman Digvijay ‘Danny’ Gaekwad failed to make the payment of ₹600 crore by 2 pm on 13 February as directed by the Supreme Court, people aware of the development said on condition of anonymity.
On 7 February, the apex court had asked Gaekwad to deposit the money by 12 February (which was later extended by a day) to prove his bona fides regarding his planned competing offer of ₹275 per share for Religare. Till that time, the court directed the Burman family’s ongoing offer for Religare to be kept open.
According to the persons cited above, the Burmans’ open offer closed at 3.30 pm with the family acquiring an additional 0.26% stake in the company, bringing their stake in Religare to 25.44%.
This is in line with the Supreme Court’s direction that if Gaekwad’s deposit was not made, the directions of its 7 February order would automatically be vacated without further reference to the court.
What now?
Subramanian said it is now up to the Burmans to guide the company from a perspective of where they would propose new additions to the board or propose a new managing director, whose appointment has to be ratified by shareholders.
“As the hostility between the board and the largest shareholder has ended, shareholders should see the development of Saluja’s ouster as a big positive. If the Burmans want to increase their shareholding in the company, they can do it through creeping acquisition or make a voluntary open offer in future at a higher than market price,” he said.
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First Published:13 Feb 2025, 11:04 PM IST
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