The Madhya Pradesh High Court on Thursday lifted the stay on Religare Enterprises annual general meeting (AGM) as well as the Reserve Bank of India (RBI)’s approval for Burmans’ open offer to acquire an additional 26% stake in the company.
Also ReadCourt stays Religare AGM, RBI’s nod for open offer
A division bench, comprising chief justice Suresh Kumar Kait and justice Vivek Jain, dismissed the case as the petitioner was not a shareholder in Religare, and therefore, not an aggrieved party. Shares of Religare Enterprises rose over 6% on Thursday, closing 4.7% higher at Rs 294.55 on the BSE.
This clears the path for the AGM, which was scheduled for December 31, after already being pushed from September. The AGM assumes importance as Religare chairperson Rashmi Saluja is up for reappointment for a fresh five-year term on the board, which has been opposed by the Burmans, proxy firm InGovern and certain institutional investors – voting for Saluja’s removal.
Also ReadRBI rejects Rakesh Asthana’s appointment to Religare’s board
Advocate Vijayant Mishra, representing the interest of Religare’s minority shareholders, had filed the public interest litigation (PIL). According to the PIL, if the open offer goes through and the four companies consolidate as per RBI’s condition, the control will fall in the hands of only 399 persons, affecting the shareholding of 73,263 persons who hold up to Rs 2 lakh worth of shares in Religare. This led to an indefinite stay on the AGM on December 18 ― two weeks before its scheduled date.
However, solicitor general Tushar Mehta, appearing for SEBI and the RBI, argued that the PIL could not stand as the petitioner was not a shareholder, and the court also lacked jurisdiction for a Delhi-based company.
Also ReadBoardroom battles explained: Dabur’s Burman family vs Rashmi Saluja of Religare
Mehta called for the PIL’s dismissal and imposition of heavy costs on the petitioner, pointing out that the regulatory approvals from SEBI, RBI and Irdai were already in place for the Burman family’s open offer. The RBI had given its approval in early December, which was soon followed by SEBI’s approval.
The court granted the petitioner, Mishra, the liberty to approach an appropriate forum in accordance with the law.
» Read More
