Delhi High Court issues notice to RoC, Religare in Burman’s plea over AGM extension

 The Delhi High Court's division bench has issued notices to the Registrar of Companies (RoC) and Religare Enterprises Ltd following a plea by MB Finmart, part of Burman Family companies, opposing the RoC’s decision to extend Religare’s annual general meeting (AGM) by three months. 

The RoC had granted Religare’s request for the extension on 22 August, postponing the company's 40th AGM to December. Originally, the AGM was scheduled for 30 September, and Religare did not provide a reason for seeking the extension at the time.

Read this | Religare upsets investors by delaying AGM

MB Finmart, in its plea filed before the Delhi High Court, has argued that the RoC’s extension was granted without adhering to Section 96(1) of the Companies Act, which only allows such extensions in "exceptional circumstances." 

A bench comprising Justices Suresh Kumar Kait and Girish Kathpalia heard the case and issued notices to RoC and Religare, requiring them to file their responses within 10 days. MB Finmart has been given five days thereafter to file its reply, and the next hearing has been set for 21 October.

The primary issue at stake is the reappointment of Religare’s chairperson, Rashmi Saluja, which was to be decided at the postponed AGM. MB Finmart, represented by Harish Salve, argues that the delay has negatively impacted shareholders' rights, especially in light of the ongoing tensions between the Burman family and Religare’s leadership.

As of September 2023, the Burman family held a 21.54% stake in Religare Enterprises. On 25 September, they announced plans to increase their shareholding by 5.27%, taking their total stake to over 25%, which would trigger an open offer under the Securities and Exchange Board of India's Substantial Acquisition of Shares and Takeovers (SAST) Regulations. The Burmans’ open offer proposes acquiring 9 crore equity shares at Rs. 235 each, totalling ₹2,115 crore, representing a 26% stake in the company.

More here | Sebi directs Religare’s board, Saluja to seek approvals for Burman open offer

This ongoing power struggle has placed Burman family members and Rashmi Saluja at odds. The Burmans have accused Saluja of obstructing the open offer, an allegation she has denied, countering that the Burman family is not 'fit and proper' to take control of the company.

Also read | Mint Explainer: Why did Sebi issue notice to Rashmi Saluja, Religare board?

The case highlights the escalating tensions between the company’s management and its major shareholders, with the High Court’s involvement adding a legal dimension to the ongoing corporate battle.