The Reserve Bank of India has refused to approve Religare Enterprises’ application to appoint Rakesh Asthana as a director on its board, the company said in an exchange filing on Thursday.
“…it is advised that your proposal to appoint Sh. Rakesh Asthana as a director on the board of Religare Enterprises Limited does not have the approval of the Reserve Bank of India,” the central bank said in a letter to the company dated May 15.
Last November, the Religare’s board appointed Asthana, former police commissioner of Delhi and CBI special director, as an additional director and to be designated as a whole-time director, subject to shareholder and regulatory approvals.
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Three months after the board approval, the Burman family, which holds almost 26% stake in Religare, had opposed the appointment. They had written to the Securities and Exchange Board of India (SEBI) alleging that the mandatory shareholder approval was not taken within three months of his appointment and was a breach of its rules.
Religare and Rakesh Asthana were initially contemplating writing to the RBI seeking a review for reconsideration the application but couldn’t as the company was “busy in preparing for the herculean task of making ready multiple applications to regulators in respect of change of shareholding/ control/ management of the company and its group entities,” in relation to the Burmans open offer.
The company and its committee of independent directors had raised concerns regarding the acquirers, its promoters and directors, which were being forwarded to the market regulator with a request to conduct a detailed investigation, it said.
Further, the company also missed disclosing this communication to the stock exchanges earlier due to an oversight. “In this rush and with the focus shifting on filing regulatory applications etc the issue of refusal of approval by RBI for appointment of Shri Asthana being taken up with RBI for redressal reconsideration got missed and in this state of events, the fact of not making the disclosure under SEBI LODR was also missed due to oversight,” the company said.
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Religare’s management,
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