Religare Enterprises denies allegations made by InGovern, defends governance record

New Delhi: Religare Enterprises Limited (REL) has firmly rejected the allegations put forth in a recent report by InGovern Research Services titled “Navigating Turbulent Waters Amidst Governance Challenges.” The company claims that the report misrepresents facts, maligns the conduct of its current management, and presents misleading conclusions about the company’s governance practices.

According to REL, the InGovern report omitted material information regarding ongoing legal proceedings and made unsubstantiated inferences intended to influence shareholders and the broader market. The company has criticized InGovern for disclaiming responsibility for the accuracy and completeness of its analysis.

The report cited various issues relating to regulatory actions and corporate governance concerns, including a SEBI show cause notice, an IRDAI order, insider trading allegations, and the postponement of Religare’s Annual General Meeting (AGM). REL provided clarifications on each point, emphasizing that several matters referenced in the report are currently sub-judice, and are therefore beyond public comment.

The InGovern report discussed a show cause notice issued by the Securities and Exchange Board of India (SEBI) to REL and its independent directors. According to REL, this notice, issued on June 19, 2024, is currently being contested before the Securities Appellate Tribunal (SAT), with directions from SEBI’s interim order temporarily stayed. 

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”. The company dismissed insider trading allegations against its Executive Chairperson, Dr. Rashmi Saluja, as premature since no final verdict has been passed.

The report also expressed concerns about Religare’s decision to postpone its 40th AGM, suggesting governance issues. REL responded by explaining that it sought an extension from the Registrar of Companies (RoC) due to the pending regulatory approval of an Open Offer, which could significantly impact the company’s shareholding. The extension, granted by the RoC, was challenged in court by M.B. Finmart Pvt. Ltd. and others but was ultimately upheld by the Delhi High Court. The extension was further appealed but remains in effect, with the next hearing scheduled for October 2024.

The report claimed that incoming auditors, Nangia & Co LLP, had withdrawn their consent to be appointed as REL’s statutory auditors. In response, REL clarified that Nangia & Co LLP withdrew their consent before formally assuming the role, and the company is in the process of appointing a new auditor from a reputable firm.

Dr. Rashmi Saluja, Executive Chairperson of REL, condemned the report as manipulative and damaging, hurting the credibility of the company. “We are compliant with all laws and regulations and continue to uphold the sanctity of the Hon’ble High Court of Delhi,” she stated, questioning InGovern’s motives in publishing the report.

 Dr. Saluja joined REL’s board in 2018 as an independent director and became Executive Chairperson in 2020. Under her leadership, REL has made strides in improving its corporate governance and business operations, including clearing significant debt. In February 2024, the company repaid ₹9,000 crore in outstanding loans, becoming external debt-free. REL’s stock has also seen significant gains, rising from ₹17 in 2020 to ₹276.95 as of September 2024.

Despite these achievements, the InGovern report suggested that Dr. Saluja’s leadership faced challenges, a claim REL has vigorously denied.

The company has reaffirmed its commitment to transparency, strong governance, and creating long-term value for its shareholders while contesting the allegations made in the InGovern report.