HC notice to cos registrar, Religare Ent on Burman group entity plea
This story was originally published at 22:18 IST on 18 September 2024
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NEW DELHI – The Delhi High Court today issued a notice to the Registrar of Companies and Religare Enterprises Ltd on a petition by Burman group company M.B. Finmart Pvt Ltd against the registrar's order to provide a three-month extension to Religare Enterprises to hold its annual general meeting for the financial year ended March. The high court will hear the matter next on Oct 21.
On Aug 30, a single judge bench of the high court had dismissed M.B. Finmart's plea. Challenging this, M.B. Finmart, the shareholder of Religare Enterprises, had moved the division bench of the high court.
The present management of Religare Enterprises had applied for extension of time to hold the annual general meeting which was to be held on or before Sep 30. Granting a three-month extension, the registrar permitted Religare Enterprises to hold the meeting on or before Dec 31.
M.B. Finmart has argued that no "special reasons" were provided by the Registrar of Companies for allowing a three-month extension to Religare Enterprises to hold its 40th Annual General Meeting. The management of Religare Enterprises was under scrutiny by various government agencies, including the Enforcement Directorate, and the Reserve Bank of India and the Securities and Exchange Board of India, said M.B. Finmart.
Despite M.B. Finmart holding 25% share in Religare Enterprises, the lack of reasons provided by the registrar has resulted in irreparable prejudice, preventing them from questioning and seeking remedies against the manner in which the affairs of Religare Enterprises were being conducted, which is allegedly unlawful and financially imprudent, said the petitioner. The Registrar of Companies has said that no fundamental rights of the petitioners had been violated, and therefore, writ jurisdiction of the high court cannot be invoked.
The petitioner had said that in the present case, the three-year term of the current statutory auditor of Religare Enterprises was to expire this month. By not holding the annual general meeting in September, the board of directors of Religare Enterprises is, in effect, attempting to extend the maximum tenure of the existing statutory auditors of three years in violation of the applicable RBI guidelines and circulars.
The single judge overlooked the fact that the sole ulterior motive for extension of the annual general meeting was to prolong Rashmi Saluja's directorship to continue her unsanctioned and unfettered exploitation of Religare Enterprises' resources and obstruct the open offer by it, said the petitioner. Admittedly, Saluja is due to retire by rotation as executive director of Religare Enterprises at the annual general meeting to be held this month as has been the norm for the last three years, said the petitioner. Saluja would not have been reappointed as she had lost the trust and confidence of the shareholders, said the petitioner. The single judge ignored the fact that extending the meeting would allow Saluja to continue her exploitative regime and when she was under scrutiny by various regulatory authorities.
Last month, the Enforcement Directorate had searched the premises of Religare Enterprises' Chairperson Saluja in connection with a case of cheating and criminal conspiracy to defraud shareholders of Religare Enterprises. The Burman family, the largest shareholder in Religare Enterprises, is currently embroiled in a conflict with the company's chairperson over the change of control at the financial firm in key licences for insurance, lending and broking business. Earlier, four acquirer companies of the Burman group, including M.B. Finmart, had made an open offer for Religare Enterprises.
Today, shares of Religare Enterprises ended 0.2% higher at 282.70 rupees on the National Stock Exchange. End
Reported by Surya Tripathi
Edited by Ashish Shirke
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