Proxy advisory firm InGovern raises concern over Religare AGM delay
Proxy advisory firm InGovern has raised concerns about governance at Religare Enterprises amid a delay in the annual general meeting (AGM) and has called for scrutiny by the market regulator Securities and Exchange Board of India (Sebi).
Financial firm Religare had postponed its AGM from September to December this year.
The postponement comes at a time when its executive chairperson Rashmi Saluja has been under fire for stalling the open offer by the Burmans—the largest shareholders in the company—and for allegations of insider trading and alleged violations in the issuance of employee stock options (ESOPs) from a subsidiary.
The company cited pending statutory and regulatory approvals in relation to the ongoing open offer and the potential impact on the company and its shareholding as reasons for the postponement.
In a report published on Sunday, the proxy advisor noted that the postponement led to frustration among shareholders as the company has not provided a valid reason for the delay, especially since it had already published its financials on the exchanges.
“The postponement is particularly significant because Rashmi Saluja, the executive chairperson, was due for reappointment as she will retire by rotation at the originally scheduled AGM in September. As the only non-independent director, her position requires reappointment at each AGM, making the timing of this delay critical,” said InGovern.
Certain institutional investors have expressed their discontent, suggesting that it may be a strategy to avoid a vote on Saluja’s reappointment, the report added.
“Sebi has the authority to initiate comprehensive investigations into the circumstances surrounding Religare’s AGM postponement. The regulator may examine the decision-making processes that led to the delay, as well as the company’s actions regarding share allotments and employee stock ownership plans (ESOPs). This scrutiny aims to uncover any potential corporate governance issues or regulatory violations,” noted InGovern.
The market regulator is already probing Saluja for insider trading allegations related to trades before the open offer and the stake purchase by the Burmans.
“Shareholders now face several options in response to the delay: contesting the extension of the AGM, or waiting for the rescheduled AGM to vote on Saluja’s reappointment and other matters,” added the proxy advisor.
First Published: Sep 22 2024 | 4:30 PM IST