IRDAI Orders Care Health To Repurchase ESOPs Granted To Chairperson Rashmi Saluja

The Insurance Regulatory and Development Authority of India has asked Care Health Insurance Ltd to buy back ESOPs granted to its non-executive Chairperson Rashmi Saluja and also imposed a fine of Rs 1 crore on the insurer for violation of its norms.

The 2016 Remuneration Guidelines also impose a duty on the insurer to ensure that non-executive directors (irrespective of being a chairperson or otherwise) are not provided any remuneration, other than profit-related commission and sitting fee, Irdai said in its order.

"In relation to the averment of CHIL that several employees of Religare Enterprises were granted ESOP of CHIL, ever since the inception of the ESOP Scheme of CHIL, the authority finds no merit, given that CHIL has failed to establish any details in relation to whether any of the said employees of REL were non-executive director of CHIL at the time of grant of ESOPs," it said.

CHIL is a subsidiary of Religare Enterprises Ltd. Saluja is the executive chairperson of Religare Enterprises and non-executive chairperson of CHIL.

The issuance of employee stock ownership plan (ESOP) of the company to Saluja in her capacity as the executive chairperson of Religare Enterprises is in violation of law, the order dated July 23 said.

It is in non-compliance with the conditions or restrictions as imposed by Irdai while granting permission to be common director.

Law prohibits payment to non-executive director in form other than 'profit-related commission' and 'sitting fees'.

It has directed CHIL "to cause a buyback of 75,69,685 shares allotted to Rashmi Saluja at the same price per share as the exercise price (Rs 45.32 per share), in compliance with applicable laws, including the provisions of Companies Act, 2013". The compliance and confirmation of the same needs to be completed within 30 days from the date of the order, it said.

To the extent of any stock options to Saluja that remains unexercised and/or unvested as on the date of the order, CHIL is directed to cancel and revoke such stock options, it said.

"In any event, CHIL shall ensure that no further grant and/or allotment shall be made to Rashmi Saluja. The compliance and confirmation of the same needs to be completed within 15 days from the date of the order," it said.

To secure the proper management of CHIL, from the date of this order, any decision made by the Board of CHIL in relation to any remuneration/payment perquisite or other benefit, monetary or otherwise in relation to any member including MD & CEO, shall be implemented by only after prior approval of IRDAI, it added.

The agency also imposed a penalty of Rs 1 crore on CHIL.

CHIL is directed to deposit the penalty amount within 45 days of this order, it said.

Saluja is locked in a pitched battle with Dabur group promoters Burmans who over the management for control of the financial services firm Religare Enterprises, triggered by an open offer bid.

Burmans, who hold around 25% of REL through four entities -- MB Finmart, Puran Associates, VIC Enterprises, and Milky Investment and Trading Co -- announced an open offer on Sept. 25, 2023, to acquire 26% stake from public shareholders.

Soon after the open offer bid, Burmans complained to capital market regulator Sebi for violation of insider trading rules by the chairperson and appointment of board of her choice.

They also complained about grant of ESOPs to her by CHIL.