Kedaara Capital votes against Saluja’s reappointment as resolution passes with majority

Mumbai: Private equity (PE) firm Kedaara Capital, which owns around 16% stake in Care Health Insurance, voted against Religare chairperson Rashmi Saluja’s reappointment to the Care board, in an ordinary resolution that passed with a majority, according to one person with knowledge of the information.

“Commercial reasons,” a second person informed on  Kedaara Capital’s thinking said, ahead of the annual general meeting on Monday. 

The PE firm sought a legal opinion before casting its vote on Monday.

Kedaara Capital did not reply to requests for comment.

Religare Enterprises, which owns 63-64% in Care Health Insurance Ltd, voted in favour of Saluja’s appointment. 

Kedaara’s decision follows the Burman family’s letter to Care Health Insurance board on 26 September ahead of the AGM, in which it sought to remove Saluja as a director on the grounds that there were investigations led by the Enforcement Directorate (ED) and the Securities and Exchange Board of India (Sebi) against her.

Also read: Care throws a challenge—and an apology—to insurance regulator on Saluja’s Esops

The letter argued that this was against Care Health’s Articles of Association. On 6 September, ED filed an First Information Report (FIR) against Saluja and others for allegedly filing false cases against the Burmans. The ED charges were filed for alleged cheating and criminal conspiracy. The Burmans moved to take over Religare Enterprises in September last year, a battle that has now turned hostile, with the REL board resisting the move. 

On Sunday evening, ahead of the AGM, additional independent director on Care Health’s board Pratap Venugopal told Mint that the Burman letter did not have a legal standing as "investigation by ED and/or Sebi would not automatically disqualify a Director from being reappointed.” 

A person familiar with Saluja’s thinking argued that FIRs could be contested, observing that many people including Union ministers have FIRs against them. 

On Monday evening, Religare, Saluja and the Burmans did not respond to a request for comment. But a spokesperson for Care said, "The Directors of Care Health Insurance Ltd (“CARE”) reviewed the communication dated 27.09.2024 received from the Proposed Acquirers of Religare Enterprises Ltd (“REL”) demanding the removal of Dr. Rashmi Saluja from the Board of Directors of CARE. In light of a legal opinion received by CARE, the Directors agreed that there exists no cause for removal of Dr. Rashmi Saluja and a suitable response is being sent to the Proposed Acquirers accordingly.”

Postponing AGM

The Care AGM comes in the wake of its parent Religare moving the Registrar of Companies in August to postpone its own AGM to December, a development which has upset shareholders, Mint reported last month.

Also read: Religare upsets investors by delaying AGM

Religare, Saluja and the Burmans did not respond to a request for comment. 

Care Health, seen as Religare's crown jewel, is expected to go public later. The company is worth at least ₹10,000 crore, based on the price of its shares at ₹110 in its last rights issue in 2022. It underwrote a premium of ₹6,864.5 crore in 2023-24, recording a 33-51% year-on-year growth.

The Care health insurance board and the insurance regulator are also currently at odds over whether it is appropriate for Saluja to receive Esops (employee stock options) at Care. While Care board has argued in favour of granting her Esops, the insurance regulator has fined Care for doing so, against its express orders. The case is currently under appeal in Securities Appellate Tribunal (SAT). 

Inputs from Varun Sood in Bengaluru

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