Burmans contest Religare’s Rakesh Asthana move
months from the date of appointment, whichever is earlier.
On 7 February, 2024, after the three-month period ended, Religare issued a notice to its shareholders for approval for various resolutions via e-voting, without mentioning the Asthana appointment, Burmans alleged.
“It is well settled that seeking the approval of the shareholders through a special resolution by way of a remote e-voting facility is nothing but a general meeting of the company (REL). In this context, your attention is drawn to Section 110 (2) of the Companies Act, 2013 and Rule 22 of the Companies (Management and Administration) Rules, 2014,” said the 6 March letter.
“By not seeking the approval of the shareholders for appointment of Mr. Rakesh Asthana in the forthcoming general meeting, REL has breached Regulation 17(1C) of the SEBI LODR. This is a violation of shareholder rights on an important matter of having an incumbent whole-time executive director assuming directorship of a listed company,” the letter said.
Email queries sent to a Sebi spokesperson, Saluja, and Asthana remained unanswered.
“As a matter of policy, we do not comment on regulatory matters,” a spokesperson for the Burman family said in response to queries by Mint.
A Religare group spokesperson said, “REL being an NBFC is regulated by the Reserve Bank of India. The appointment of directors which would amount to change of management as per regulatory framework of Reserve Bank of India can be made only after the prior approval of the Reserve Bank of India. The approval by board was clearly indicative of this regulatory requirement. The approval of RBI for the appointment is awaited. In the absence of such regulatory approval, the question of seeking shareholders’ approval cannot arise. It is only after the approval of RBI is received, that REL is required to approach its shareholders for approval within the timelines specified in Sebi Regulations.”
Asthana, an Indian Police Service officer from the 1984 batch of Gujarat cadre, had joined Religare in August as group head of corporate affairs and business advisor. Before his retirement as Delhi Police commissioner in 2022, he was chief of Border Security Force (BSF), director general of the bureau of civil aviation security (BCAS), and as the director general of narcotics control bureau (NCB). He also served as a deputy inspector general at CBI. He has been felicitated by the President’s police medal for distinguished services.
“More than three months have elapsed since 2 November, 2023. Regulation 17(1C) of the SEBI LODR prescribes an outer time frame of three months within which the approval of shareholders for appointment of the person to the board of directors must be obtained. This has also not been followed,” the letter said.
The Burmans’ letter said that under Rashmi Saluja’s chairmanship, Religare “continues to act in blatant breach of the Sebi’s listing rules, and due to such allegedly prejudicial conduct, the shareholder interest is being compromised”.
The Burmans also urged Sebi to direct Religare to add an agenda matter to the meeting notice to consider Asthana’s appointment.
Appointing an executive director will need the approval of at least 75% of shareholders, a hard task for Religare given that the Burmans who are fiercely opposed to its current leadership hold more than 25%. This empowers them to block special resolutions.
The letter says if Religare does not comply with the above, Sebi should direct the company to withdraw, cancel, and annul Asthana’s appointment as a director and make appropriate announcements to all shareholders.
If Sebi finds merit in the Burmans’ complaint, it may penalize the board of Religare and reject Asthana’s appointment as director.