Religare board rallies behind chairperson Saluja, defends her share sale

The board of Religare Enterprises Ltd (REL) has rallied behind its embattled chairperson Rashmi Saluja, saying she had turned around the financial services company whose market cap has increased to about a billion dollars from under $100 million in March 2018.

The board — which is fending off an Rs 2,200 crore open offer by the Burman family — said accusations had not only targeted Saluja but the entire Religare management that has made Religare debt free.

“Our story has been one of resurgence under the guidance of the Board of Directors led by Saluja, executive chairman.

“Religare is now at an inflexion point due to the tireless efforts of the last five years,” said the board in a statement made in response to a report by Ingovern, a proxy advisory firm.

Ingovern has said that Saluja had got excessive remuneration in breach of regulations worth Rs 480 crore and it was not disclosed by REL.

The board said a one-time settlement with banks was completed through organic collections and payments of more than Rs 9,000 crore was made.

“Religare has now grown into a leading financial services player and has enhanced value for all its stakeholders, including shareholders, employees and customers while maintaining the highest levels of corporate governance,” said the REL board.

The board denied that a representative of the Burman family had in a meeting on September 20 told Saluja about their open offer proposal for Reiligare a few days before the open offer was announced.

Saluja is accused of selling her shares before the open share was made.

Saluja liquidated her ESOPs, (employee stock ownership plan), along with 12 other employees of Religare.

“This process of liquidation of ESOPs through financing and sale was set in motion several days before the said meeting that happened on September 20.

“The actual sale of shares that happened on the 21st and 22nd of September 2023 was made at the prevalent market price,” said the statement, adding that the share sale proceeds by Saluja were utilised to further invest in ESOPs of a Religare Group entity.

Saluja was granted ESOP worth Rs 250 crore in Care Health Insurance, a subsidiary of REL, which has an ESOP pool of 12.5 per cent of equity for its employees and another 2.50 per cent pool for Religare Group employees.

“Saluja, as an employee of REL, was granted 227,11,327 options (to purchase shares of Care) subject to terms and conditions of the scheme from the above-mentioned pool with an exercise price per option at Rs.45.32 per share in June 2022.”

“As per the terms, out of the above, 33.33 per cent of the options would vest upon one year from the date of grant and issuance of minimum primary capital of Rs 250 crore by Care Health is completed.

“Further, two years from the date of grant and two years from the vesting commencement date, another 33.33 per cent options would vest,” said the statement.

Also, earlier than five years from the date of the grant of options to the REL employee or the listing of shares of Care, the remaining 33.34 per cent options would vest.

“The reported remuneration includes the perquisite value of ESOPs exercised only and not of unexercised ESOPs as the gain (if any) accrued only at the time of exercise of ESOPs.”

The Care Health Insurance ESOPs were granted to Saluja in her capacity as employee/ executive director and chairperson to REL.

The ESOPs were not granted to her in her capacity as non-executive chairperson of Care.

The ESOPs were issued to Saluja in full conformity with the guidelines of the insurance regulator.

Ingovern s report has said that in the last three or four years, the total valuation of options in REL and Care Health issued to Saluja increased to more than Rs 480 crore.

This is in addition to compensation paid at REL, Ingovern had said.

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