Religare board rallies behind chairperson Saluja, defends her share sale
The board of Religare Enterprises Ltd (REL) has sided with embattled chairman Rashmi Saluja, saying it has turned around the financial services company, whose market capitalization has risen from less than $100 million in March 2018, to around $1 billion.
The board – which is fending off an open offer of Rs 2,200 crore from the Burman family – said the allegations were not only against Saluja but against the entire management of Religare that made Religare debt-free.
“Our story is one of revival led by the Board of Directors led by Saluja, Executive Chairman. Religare is now at an inflection point as a result of its tireless efforts over the past five years,” the board said in a statement in response to a report by Ingovern, a proxy consultancy firm.
Ingovern has said that Saluja had been paid excessive remuneration worth Rs 480 crore in violation of regulations, and this was not disclosed by REL.
The board said a one-time settlement with the banks was finalized through organic collections and payments of over Rs 9,000 crore were made. “Religare has now emerged as a leading player in the financial services industry and has enhanced value for all its stakeholders, including shareholders, employees and customers, while maintaining the highest level of corporate governance,” the REL board said.
The board denied that a representative of the Burman family had told Saluja about their open offer for Reiligare at a meeting on September 20 – a few days before the open offer was announced. Saluja is accused of selling her shares before the open share was issued.
Saluja liquidated her ESOPs (employee stock ownership plan) along with 12 other employees of Religare. “This process of liquidating ESOPs through financing and sale was initiated few days before the said meeting on September 20. The actual sale of shares that took place on September 21 and 22, 2023 took place at the prevailing market price. ‘, the statement said, adding that the proceeds from the share sale were used by Saluja to further invest in ESOPs of an entity of the Religare Group.
Saluja got an ESOP worth Rs 250 crore in Care Health Insurance, a subsidiary of REL, which has an ESOP pool of 12.5 percent equity for its employees and another 2.50 percent for employees of the Religare Group.
“Saluja, as an employee of REL 227,11,327, was granted options (to purchase shares of Care) under the terms of the scheme from the aforesaid pool with an exercise price per option of Rs.45.32 per share in June 2022.”
“As per the terms, of the above, 33.33 per cent of the options would vest one year after the date of grant and the 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 after the vesting start date, an additional 33.33 percent of the options would vest,” the statement said.
In addition, the remaining 33.34 percent options would vest earlier than five years from the date of grant of options to the REL employee or listing of Care’s shares.
“Reported compensation includes only the perquisite value of ESOPs that are exercised and not of unexercised ESOPs, as earnings (if any) are only accrued at the time of exercise of ESOPs.”
The health insurance ESOPs have been granted to Saluja in her capacity as employee/director and chairman of REL. The ESOPs were not granted to her in her capacity as non-executive chairman of Care. The ESOPs were issued to Saluja in full compliance with the guidelines of the insurance regulator.
Ingovern’s report states that in the last three to four years, the total valuation of options in REL and Care Health issued on Saluja has risen to over Rs 480 crore. This is in addition to the compensation paid at REL, Ingovern had said.