The Battle for Religare Enterprises: A Legal and Financial Tug-of-War
The ongoing battle for control of Religare Enterprises Ltd (REL) has taken another twist as the Supreme Court of India extended the deadline for US-based investor Danny Gaekwad to deposit ₹600 crore by 2 PM on Thursday, February 13. This move provides temporary relief to Gaekwad, who is attempting to make a competing offer to acquire a stake in REL, against the Burman family’s open offer.
Background of the Takeover Battle
The Burman family, known for their ownership of Dabur India, initiated an open offer to acquire an additional 26% stake in REL in September 2023. Their offer aimed to increase their total holding to 51%, thereby consolidating control over the financial services firm. However, this plan was disrupted when Danny Gaekwad, a US-based investor, made a surprise counter-offer in January 2025, proposing to acquire a 55% stake in REL at ₹275 per share. This offer was rejected by the Securities and Exchange Board of India (SEBI) on the grounds that it was “time-barred”.
Legal Proceedings and Supreme Court Involvement …….Religare Case
Gaekwad challenged SEBI’s decision in court, arguing that the deadline for the open offer should be January 2025, based on approval granted by the Reserve Bank of India (RBI) in December 2024. On February 7, 2025, the Supreme Court directed Gaekwad to deposit ₹600 crore by February 12 to demonstrate the legitimacy of his bid. The court also extended the Burman family’s open offer period until February 12.
During the hearing, Gaekwad informed the court that he had attempted to transfer the money but required RBI approval, which had not been granted. The Supreme Court, led by Chief Justice Sanjiv Khanna, allowed Gaekwad an extension until 2 PM on February 13 to make the deposit. The court specified that the deposit should be made into a bank account nominated by the RBI.
The Role of SEBI and the RBI
SEBI’s role in this dispute is crucial as it must determine the correct cut-off date for the open offer and evaluate Gaekwad’s exemption application under SEBI’s Takeover Code. The RBI’s approval is also essential for Gaekwad to remit funds from abroad. Gaekwad had requested the RBI to approve an escrow account for the deposit, but he had not received a response by February 12.
…….Religare Case
Rashmi Saluja’s Petition
Adding another layer of complexity to this battle is the ousted REL Executive Chairperson, Rashmi Saluja, who filed a petition in the Delhi High Court on February 12, 2025, seeking to quash the open offer by the Burman family-led entities. Saluja’s petition argues that the Burman family is evading RBI’s mandatory conditions to benefit financially at the expense of minority shareholders. The Delhi High Court adjourned the hearing of Saluja’s petition until February 19. …..…….Religare Case
Implications and Future Outlook
The Supreme Court’s extension provides Gaekwad with a narrow window to secure the necessary funds and regulatory approvals. If he fails to deposit the ₹600 crore by the extended deadline, the court’s previous order will be automatically set aside. This development underscores the high stakes involved in the battle for REL, with both the Burman family and Gaekwad vying for control of the company.
The outcome of this legal and financial tug-of-war will depend on SEBI’s decision on the correct cut-off date for the open offer and Gaekwad’s exemption application. Meanwhile, the fate of the Burman family’s open offer and Gaekwad’s competing bid hangs in the balance, with significant implications for REL’s shareholders and the company’s future direction.