Burman Family Calls For Probe Over ESOPs To Religare's Rashmi Saluja

The Burman family, owners of Dabur India Ltd., have called for a probe into the allotment of shares of Religare Finvest Ltd. to Rashmi Saluja through employee stock ownership plans.

The family alleged that 2.14 crore shares, constituting around 8% of the company's equity, were allotted to Saluja without approval and requisite disclosure to parent Religare Enterprises Ltd. shareholders.

"This raises question mark on the management and the independence of the independent directors and their complicity in such unjustified dole outs," said a statement released on Wednesday. The family said such actions have "eroded trust and confidence in the REL board, necessitating urgent need to restore credibility".

They also asked the company's board to disclose whether more instances of ESOP issuances to entities and potential conflicts of interest exist.

Religare responded to the allegations, saying the company sought shareholders' nods at its annual general meeting on Sept. 26 for the proposed grant of Religare Finvest ESOPs to Saluja, which was granted via a special resolution.

However, the company said it has not placed any proposal with the nomination and remuneration committee till date for the grant of these ESOPs to Saluja. "Since no new shares were issued/allotted in the matter, there is no contravention" of regulatory rules, it said.

These are the second such allegations by Dabur in two months.

In November last year, the Burmans alleged violations of insider trading rules by Religare Enterprises' Executive Chairperson, Rashmi Saluja.

According to a letter dated Nov. 7 that was submitted to the Securities and Exchange Board of India, the Burmans said that Saluja sold shares of the company worth Rs 34.71 crore, following communication of the Burman family’s intention to make an open offer to Religare’s shareholders.

The information was communicated to Saluja on Sept. 20, on a confidential basis, in her “professional capacity as executive chairperson of the company.”.

The shares were sold on Sept. 21 and Sept. 22, after a meeting was held between Saluja and the Burman family’s representative, Arjun Lamba.

Days later, the Burmans flagged the “high compensation” of Saluja, which is in excess of Rs 150 crore. The amount is “not in line with compensation norms by any reasonable parameters," a Burman family spokesperson said.

However, Religare rejected the issue, stating that it is “completely false and erroneous.”.