SC asks Gaekwad to keep ₹600 cr with Sebi; Burman offer to stay open till decision | Company Business News

Mumbai: The Supreme Court on Friday asked Florida-based Digvijay Danny Gaekwad to deposit ₹600 crore with the Securities and Exchange Board of India (Sebi) by 12 February to prove his bona fides regarding his planned counter-offer for Religare Enterprises Ltd.

It also directed keeping the Burman family’s ongoing offer for Religare open until the regulator decides on Gaekwad’s plan. A two-judge bench led by Chief Justice Sanjiv Khanna said if Gaekwad does not deposit the said amount, the order will automatically be set aside, and Burman’s open offer will close. The Burmans’ offer for Religare was scheduled to end on Friday.

In an open offer, the acquiring company gives existing shareholders the option to sell their shares and exit the company if they do not want to remain invested under the new ownership.

Also read | Rashmi Saluja’s bid to extend her stay at the helm of Religare faces a big jolt

Sapna Govind Rao, a Religare shareholder based in Bangkok, and Gaekwad, had separately approached the top court against a Delhi High Court order which refused to halt the Burman family’s open offer and instead consider Gaekwad’s competing plan. They asked for Burman’s offer to remain open so that competing offers could be considered. If the open offer closes, competing offers cannot be made.

Appearing for the Burman family entities, senior advocates Abhishek Manu Singhvi and Mahesh Jethmalani argued that Gaekwad’s counteroffer came after a delay of 18 months. They claimed that the two petitions were filed at the behest of Rashmi Saluja who did not want to be removed as Religare chairperson, and was trying to stall the Burman acquisition. Saluja had been in dispute with the Burmans since their offer in September 2023 to buy 26% of shares from public investors at ₹235 a share.

Senior advocate Mukul Rohatgi, appearing for Gaekwad, vehemently opposed this argument, asserting that Gaekwad filed his counteroffer within the required time. Rohatgi specified that Gaekwad wrote to Sebi chair Madhabi Puri Buch on 24 January for permission to launch an open offer for 26% in Religare and revised his offer to at least 55% on 26 January. This was a week after 18 January, when the Burmans made their open offer public on the exchanges, he said.

Also read | Two Religare directors criticise haste in revealing Gaekwad bid; Saluja moves HC

Solicitor general Tushar Mehta, appearing for the regulator, informed the court that Gaekwad’s letter had been returned to him as it was non-compliant with the regulator’s procedure. He further submitted that Gaekwad’s follow-up application was made on 1 February after Burman’s offer had been opened.

The court noted that the key issue for the regulator to consider and decide upon was the date of the public announcement of the open offer. The bench questioned why Gaekwad’s application had not been decided, especially if his offer provided a better share price. “As a market regulator, you are looking after the shareholders’ interests,” the bench said, adding, “Sebi should have decided, not shied away.”