Religare's Saluja Under IRDAI Probe for Care Health Options, Dispute with Burmans Heats Up

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Religare's Saluja Under IRDAI Probe for Care Health Options, Dispute with Burmans Heats Up

Rashmi Saluja Under Investigation for Stock Options in Care Health Insurance

Rashmi Saluja, the executive chairperson of Religare Enterprises (REL), is being investigated by the Insurance Regulatory and Development Authority of India (IRDAI) for receiving stock options in Care Health Insurance. Saluja is the non-executive chairperson of the firm.

The investigation was initiated in response to a Right to Information (RTI) query filed by Rahul Kanoj. The IRDAI revealed that Care Health had sought its approval to grant stock options to Saluja in December 2021, but the request was rejected. Despite the rejection, Care Health went ahead and allotted the stock options to Saluja.

The stock options granted to Saluja were worth Rs 250 crore, representing approximately 2.5% of the unlisted insurer's shareholding. Proxy advisory firm InGovern noted that the exercise price for these options was Rs 45.32 per share in January 2022, while a rights issue of CARE shares in the same year was priced at Rs 110 per share.

This situation has further intensified the ongoing dispute between the Burman family, the largest shareholder of Religare Enterprises, and Saluja. The Burmans have accused Saluja of illegally issuing 22.7 million options in Care Health and violating corporate governance and insider trading rules.

In September 2023, the Burmans accused Saluja of insider trading violations ahead of an open offer announcement. They further alleged that Saluja possessed crucial price-sensitive information, not disclosed to the stock exchanges, before selling 2.71 million shares worth Rs 43 crore between March 26 and 28.

On October 18, independent directors of Religare wrote a letter to regulators, including the Reserve Bank of India, SEBI, and the insurance watchdog, accusing the Burmans of fraud and other breaches.

The investigation by the IRDAI and the ongoing dispute between the Burmans and Saluja raise serious concerns about corporate governance and transparency within Religare Enterprises and Care Health Insurance. It remains to be seen how these issues will be resolved and what the implications will be for the companies involved.