Board of Care Health Insurance decided to retain Rashmi Saluja as chairperson, despite the Burman family’s demand for her removal. The Burmans, major shareholders of Religare Enterprises, had called for her removal. The directors of Care Health Insurance cited legal advice in rejecting the demand.
Board of Care Health Insurance on Monday decided to retain Rashmi Saluja as chairperson of the board despite demand for removal by Burman family-controlled companies. The Burman family is a major shareholder of Religare Enterprises, the holding company of Care Health Insurance.
The directors of Care Health Insurance Limited (CARE) reviewed the communication dated September 27, 2024, received from the proposed acquirers of Religare Enterprises Limited (REL), demanding the removal of Rashmi Saluja from the Board of Directors, the health insurance said in a statement.
“In light of a legal opinion received by CARE, the Directors agreed that there exists no cause for removal of Rashmi Saluja and a suitable response is being sent to the proposed acquirers accordingly,” it added
Religare Enterprises’ Rashmi Saluja
Burmans, who holds around 25 per cent of REL through four entities — MB Finmart, Puran Associates, VIC Enterprises and Milky Investment and Trading Co — announced an open offer on September 25, 2023, to acquire a 26 per cent stake from the public shareholders.
The Rs 2,116 crore open offer plan last year sparked a row between REL management and the Burmans, with both sides trading charges.
Kedaara Capital votes against Saluja’s reappointment as resolution passes with majority
Mumbai: Private equity (PE) firm Kedaara Capital, which owns around 16% stake in Care Health Insurance, voted against Religare chairperson Rashmi Saluja’s reappointment to the Care board, in an ordinary resolution that passed with a majority, according to one person with knowledge of the information.
“Commercial reasons,” a second person informed on Kedaara Capital’s thinking said, ahead of the annual general meeting on Monday.
The PE firm sought a legal opinion before casting its vote on Monday.
Kedaara Capital did not reply to requests for comment.
Religare Enterprises, which owns 63-64% in Care Health Insurance Ltd, voted in favour of Saluja’s appointment.
Kedaara’s decision follows the Burman family’s letter to Care Health Insurance board on 26 September ahead of the AGM, in which it sought to remove Saluja as a director on the grounds that there were investigations led by the Enforcement Directorate (ED) and the Securities and Exchange Board of India (Sebi) against her.
The letter argued that this was against Care Health’s Articles of Association. On 6 September, ED filed an First Information Report (FIR) against Saluja and others for allegedly filing false cases against the Burmans. The ED charges were filed for alleged cheating and criminal conspiracy. The Burmans moved to take over Religare Enterprises in September last year, a battle that has now turned hostile, with the REL board resisting the move.
On Sunday evening, ahead of the AGM, additional independent director on Care Health’s board Pratap Venugopal told Mint that the Burman letter did not have a legal standing as “investigation by ED and/or Sebi would not automatically disqualify a Director from being reappointed.”
Postponing AGM
The Care AGM comes in the wake of its parent Religare moving the Registrar of Companies in August to postpone its own AGM to December, a development which has upset shareholders, Mint reported last month.
Religare, Saluja and the Burmans did not respond to a request for comment.
Care Health, seen as Religare’s crown jewel, is expected to go public later. The company is worth at least ₹10,000 crore, based on the price of its shares at ₹110 in its last rights issue in 2022. It underwrote a premium of ₹6,864.5 crore in 2023-24, recording a 33-51% year-on-year growth.
The Care health insurance board and the insurance regulator are also currently at odds over whether it is appropriate for Saluja to receive Esops (employee stock options) at Care. While Care board has argued in favour of granting her Esops, the insurance regulator has fined Care for doing so, against its express orders. The case is currently under appeal in Securities Appellate Tribunal (SAT).
Inputs from Varun Sood in Bengalur