A two-judge bench of the Delhi High Court on Thursday dismissed Religare Enterprises Ltd’s chairperson Rashmi Saluja’s appeal seeking a stay on an earlier single-judge bench’s order that had denied her request to restrain the company’s board from voting on her reappointment as director.
Senior advocate Sandeep Sethi, representing Saluja, argued in the appeal that the annual general meeting (AGM) agenda violated her contractual tenure (which is secured until 2028), and the conditional Reserve Bank of India (RBI) approval given on 9 December 2024.
The two-judge bench of justices Rekha Palli and Saurabh Banerjee noted that voting had already commenced, and declined intervention. They also found no infirmity in the order of the single-judge bench and dismissed Saluja’s appeal. The company’s AGM is scheduled for Friday, 7 February.
Limited recourse for Saluja
Voting began on Tuesday morning for three resolutions, one of which pertains to the reappointment of Saluja as a director on the company’s board.
With this ruling, Saluja has exhausted all options to extend her tenure at the top of the financial services conglomerate, leaving her with the one last recourse of moving the Supreme Court (SC).
Senior advocate Nalin Kohli, who appeared for four of the five independent directors of the company, said that Saluja could approach the SC even though the settled law is that courts don’t stay AGMs. “She has not got relief from both the learned single judge or the Division Bench of the Delhi High Court, but if she tries her luck before the SC, it won’t come as a surprise.”
Investor and governance pushback
Mint reported on 4 February that around a third of the financial services company’s investors might be voting against Saluja’s reappointment as director in the lead up to the company’s AGM. This drastically reduces her chances of continuing at the helm of the company she helped revive from the brink of bankruptcy.
Meanwhile, some proxy advisory firms, too, have urged shareholders to oppose her reappointment, citing governance risks. An email sent to Saluja and Religare remained unanswered till press time.
Even though Saluja has not filed an appeal in the SC yet, minority shareholder Sapna Govind Rao and Florida-based businessman Digvijay ‘Danny’ Gaekwad have approached the top court against the Delhi HC’s order refusing to halt the Burman family’s open offer and instead consider Gaekwad’s ₹5,000-crore competing open offer pending approval before the Securities and Exchange Board of India (Sebi).
The SC is set to hear both the petitions on Friday.
What marked Saluja’s downfall was her opposition to the Burman family’s takeover attempts. In September 2023, the Burmans offered to buy 26% of shares from public investors at ₹235 a share. This marked the start of a nearly 18-month battle that saw charges and countercharges of impropriety traded between Saluja and the Burmans.
Investors holding 31.85% of Religare’s shares, including the Burman family, have voted against the proposal to reappoint Saluja. For Saluja to secure reappointment, she needs more than 48% of votes from eligible shareholders.
However, with 54-59% voter turnout in recent annual general meetings, her chances seem slim. Alongside the Burman family, owning 25.1% of Religare, financial services firms, mutual funds, and family offices owning 10.75% of the company have also opposed her reappointment.
As Religare has no promoter, all shareholders are considered public investors, and the AGM’s outcome hinges on smaller investors, including retail shareholders, who hold 10.21% of the company.