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Following a report published by InGovern Research Services titled “Navigating Turbulent Waters Amidst Governance Challenges”, Religare Enterprises Limited (REL) is providing clarifications to the inaccurate points mentioned in the report. By issuing the present report which contains incorrect facts and inferences which malign the conduct of the current management, InGovern has also waived off any responsibility for the completeness, accuracy or utility of their own analysis.

The report suppresses material information on matters which are ‘sub-judice’ and provides judgement to adversely influence the decision of shareholders and the securities market. The report also calls out key areas as under and REL is now providing a response and clarity to the misrepresented report as under:

1.  SEBI Show Cause Notice to Independent Directors and REL:

* The interim order cum show cause notice dated 19th June 2024 issued by SEBI and letters dated 31st May 2024 have been challenged by REL and the matter is currently sub judice  before the Securities Appellate Tribute (SAT).

* The directions under para 35 of the order of SEBI have been stayed by the SAT. The matter is currently sub-judice. 

2.  IRDAI order Vis-à-vis ESOPS

* Care health has challenged the IRDAI order dated 23.07.2024 before the SAT.

* Through the order dated 09.08.2024, SAT has stayed the impugned order dated 23.07.2024 for a period of 12 weeks. The matter is sub-judice.

3.  “Postponement of Religare’s Annual General Meeting (AGM) raises concerns around governance, shareholder rights, and the overall stability of the company. The decision has left shareholders feeling uneasy, prompting discussions about potential action they may take”:

* REL has filed an application for grant of extension of time for holding the 40th AGM by three months u/s 96 of the Companies Act, 2013 to the Registrar of Companies (RoC) of NCT of Delhi and Haryana on 21st August 2024 disclosing special reasons for such extension, namely, the status of the pending regulatory approvals of the Open Offer and its potential impact upon the company and its potential impact on the shareholding of the Company. On the basis of these reasons, the extension was allowed by the ROC vide order dated 22nd August 2024.

* This extension order was challenged by acquirers (M.B. Finmart Pvt. Ltd & Ors.) by way of writ petition to the Hon’ble High Court of Delhi which was dismissed vide a reasoned order dated 30th August 2024 by holding that no exceptional grounds for the interference with the extension order have been established by the petitioner.

* The petitioners have then appealed the dismissal order before a division bench of the High Court of Delhi and sought a stay on the operation of the dismissal order which was not granted by the division bench.

* The appeal is now fixed for 21st October 2024.

* This dismissal was deliberately concealed and suppressed to mislead the public at large in the said report.

4.  Insider trading:

* The Show cause notice issued to Dr. Rashmi Saluja is being contested and no final verdict has been passed in connection to allegations of insider trading.

 5. “The soon to be appointed auditor, Nangia & Co LLP, have withdrawn their consent for being considered for appointment as statutory auditors”.

* The auditor Nangia & Co LLP are currently auditors for Care Health Insurance Limited (A part of the Religare Group and a direct subsidiary of Religare Enterprises).

* In a filing to the stock exchanges by REL, the company announced after its Board of Directors meeting dated May 21, 2024 “subject to requisite approvals”, the appointment of Nangia & Co LLP as Statutory Auditors of the Company for a term of three consecutive years commencing from the conclusion of 40th Annual General Meeting (AGM) until the conclusion of the 43rd AGM of the Company to be held in the year 2027, in place of the existing statutory auditors i.e. M/s. S.P. Chopra & Co., Chartered Accountants, whose term shall expire at the conclusion of the forthcoming 40th AGM.

* While the appointment of M/s Nangia & Co LLP as statutory auditors of REL was to be approved by the shareholders in the AGM (which is likely to be rescheduled later keeping in mind the extension received from RoC).

* M/s. Nangia & Co LLP in the meanwhile have withdrawn their consent without citing any specific reason. This is no way reflects any governance lapse on the part of REL as the incoming auditors were yet to assume charge.

* REL is in consultation with multiple firms of repute to appoint new statutory auditors and will inform the bourses accordingly.

“The report is manipulative in nature and is a malicious attempt to hurt the credibility of the company and its leadership. We are compliant with all laws and regulations and continue to uphold the sanctity of the Hon’ble High Court of Delhi, and hence will not be able to speak on matters which are sub-judice. Of recent, short selling is becoming a trend to undermine the growing potential of Indian companies under different reasons and we would to like really to understand the actual agenda of InGovern by publishing a misleading report like this”, said Dr. Rashmi Saluja, Executive Chairperson, Religare Enterprises Limited.

Additionally, among other derogatory attempts, the report by InGovern represents Dr. Rashmi Saluja, Chairperson, Religare Enterprises Limited as she “navigates a treacherous path amid allegations threatening to undermine her authority”, and also goes on to build that “the credibility of Religare’s leadership hangs in the balance, igniting fears of instability”.

Dr Rashmi Saluja joined the board of REL as an independent director in 2018, and was later entrusted by the board with the responsibility to lead REL as an executive chairperson in February 2020. Since then the company has not only been able to repair its credibility with strong governance, it has also been able to achieve many milestones, the most recent of which is becoming an external debt free entity after it repaid the outstanding term loan and interest amounting to Rs. 163.75 crore drawn from JM Financial Products and JM Financial Credit Solutions. In February this year, it had repaid Rs. 9,000 crore to banks, effectively eliminating all its outstanding debt.

Under the leadership of Dr. Saluja and the Board, the company has worked on strong corporate governance, efficient business models and a performance driven mind set, resolving legacy issues of the group, enhancing operations and bringing all businesses back to stability and more while creating value for shareholders. Shares of REL have risen from Rs. 50 in 2018 to a low of Rs. 17 in March 2020, and now jumping to Rs. 276.95 as of today.

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