Madhya Pradesh High Court clears path for Religare AGM

The Madhya Pradesh High Court on Thursday dismissed a public interest litigation (PIL) that had indefinitely stayed Religare Enterprises Ltd’s annual general meeting (AGM), originally scheduled for 31 December, to consider the reappointment of chairperson Rashmi Saluja.

Solicitor General Tushar Mehta, representing the Reserve Bank of India, argued against the PIL filed by Madhya Pradesh-based advocate Vijayant Mishra, noting that the petitioner was not a shareholder in Religare and sought judicial intervention regarding a Delhi-based company. Mehta called for the PIL’s dismissal with imposition of heavy costs.

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Mishra subsequently requested the court’s permission to withdraw the petition, seeking liberty to file it before the appropriate jurisdictional court. The court allowed the withdrawal, vacating the interim stay on the AGM.

“The petitioner is not a shareholder, is not aggrieved by the impugned order. This petition is accordingly disposed of with liberty to petitioner to file before the appropriate court. Interim order stands vacated,” ruled a division bench of chief justice Suresh Kumar Kait and justice Vivek Jain.

The PIL claimed to protect the interests of Religare’s minority shareholders. Mishra alleged that 73,263 small investors, each holding stakes worth up to ₹2 lakh, would be adversely affected by the consolidation of four Burman family entities—Puran Associates, VIC Enterprises, M B Finmart, and Milky Investment & Trading Company—to acquire additional stakes in Religare.

Mishra argued that the Burman family’s stake-increasing efforts had sparked disputes and volatility in Religare’s operations. He urged the court to establish an independent commission to oversee the acquisition process and safeguard minority shareholders’ rights.

On 18 December, the court had stayed Religare’s AGM and the Reserve Bank of India’s approval for the Burman family to make an open offer to acquire an additional 26% stake in the company.

Several large investors in Religare had criticized the PIL, calling it a mockery of shareholder democracy and rights.

Battle for control

Religare’s AGM, initially scheduled for September and deferred to December, will address Rashmi Saluja’s reappointment as chairperson. The Burman family, which owns roughly 25% of Religare, has been pushing to remove Saluja, despite her backing from the company’s board.

Under Section 152(6) of the Companies Act, one-third of a company’s directors—excluding independent directors—must retire at each AGM. Saluja, the sole non-independent director on Religare’s board, must therefore stand for reappointment annually.

Proxy advisory firms InGovern and Institutional Investor Advisory Services (IiAS) have urged shareholders to vote against Saluja’s reappointment. They argue that the ongoing legal battles and power struggle between the Burman family and the Saluja-led management could hinder Religare’s boardroom efficiency.

The dispute traces back to 25 September 2023, when the Burman family signalled their intent to acquire a controlling stake in Religare Enterprises. The promoters of Dabur have been accumulating shares through their four entities, which belong to cousins Anand and Mohit Burman.

Also read | Rashmi Saluja may have won the battle, but the war is still on

Starting with a 9.9% stake in April 2018, the Burmans raised their holding to 14% by June 2021, acquiring another 7.5% in August 2023. In January 2024, the family’s stake surpassed 25%, granting them veto power over special resolutions in Religare.