CCI Approval For Stake Buy Does Not Give Burmans 'Clean Chit', Says Religare

Amid ongoing feud with the Burman family, Religare Enterprises on Wednesday claimed fair trade regulator CCI's approval for additional stake purchase by the Burman family entities does not "give a clean chit to the acquirers" with respect to certain alleged competition law violations.

On Tuesday, the Competition Commission of India (CCI) approved the acquisition of 31.27% of additional stake in Religare Enterprises by four entities of Dabur India promoter Burman family.

The approval came against the backdrop of the intense feud between Religare Enterprises and the Burman family over taking control of the company.

The release issued by the CCI regarding the stake purchase clearly stipulates that the "approval is without prejudice to the proceedings that may be initiated under Section 43A, 44 and/or 45 of the Competition Act, 2002", a Religare Enterprises spokesperson said.

The spokesperson said it was in connection with the combination notice issued by the acquirers forming part of the Burman Group in relation to the open offer to the shareholders of Religare Enterprises.

These sections pertain to powers of CCI to impose penalties for non-furnishing of information or submission of false information regarding combinations.

"The CCI continues to look into this violation and clearly the approval does not give a clean chit to the acquirers for the violations" under certain sections of the competition law, the spokesperson claimed.

Meanwhile, the Burman Family spokesperson said, "the approval from CCI is a reaffirmation of our commitment to Religare Enterprises Limited (REL) and its stakeholders. It also validates our vision for REL, which is aligned with the long-term interests of all the stakeholders."

The family remains committed to seamlessly completing the open offer and directing REL towards sustained success, the spokesperson said.

"We take this opportunity to urge the Board to act in a neutral manner and not solely at the behest of certain members of the senior management," the Burman family spokesperson added.

According to Religare spokesperson, it is to be noted that the company had addressed a communication to CCI highlighting the apparent inter-connection of the previous acquisition of 7.56% shareholding in REL made by Puran Associates Private Limited, VIC Enterprises Pvt. and MB Finmart Pvt. of the Acquirer Group on Aug. 16, 2023.

This transactions was notified by the acquiring group companies to the CCI pursuant to their notice dated Oct. 19, 2023, the spokesperson said, alleging, this was evidence of intentional violation of the provisions of the Competition Act, 2002 by not filing a notice to the CCI for the previous acquisition.