SC extends time for US-based Danny Gaekwad to deposit ₹600 cr with Sebi | Company Business News

The Supreme Court today permitted US-based Digvijay ‘Danny’ Gaekwad to deposit ₹600 crore by Thursday 2 pm in an account designated by the Reserve Bank of India (RBI). The apex court had directed Gaekwad to deposit this money by the end of day on Wednesday to prove the bona fides of his ₹5,000 crore competing offer against the open offer made by the Burman Family to acquire higher stakes in Religare Enterprises.

On 12 February, the Supreme Court allowed Gaekwad a brief extension of time, directing that the deposit be made by 2 pm IST on 13 February 2025, with the RBI providing the necessary details of the bank account and SWIFT number to facilitate the transfer. In its ruling, the court stressed that the other terms and conditions from its previous order dated 7 February 2025, remain unchanged, and the extension granted pertains solely to the deposit process.

Proof of bona fides

The dispute stems from a Special Leave Petition filed by Gaekwad challenging an interim order by the Delhi High Court, which allowed the Burman Family’s open offer to continue despite objections from the applicant. On 7 February, the Supreme Court directed Gaekwad to deposit ₹600 crore in accordance with the Securities and Exchange Board of India (Sebi) regulations to demonstrate the bona fides of his competing offer. The deadline for this deposit was set for 12 February.

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The court clarified that if the deposit is not made by this date, the directions in their order of 7 February will automatically be vacated without further reference to the court.

Emails to Gaekwad and Burman Family have not received any response. 

The petition filed on 12 February stated that before approaching the Supreme Court, Gaekwad had applied to the RBI seeking approval to establish an escrow account with a scheduled commercial bank to make a competing offer. In the email, Gaekwad offered to deposit ₹60 crore and obtain a bank guarantee (BG) for ₹540 crore. This approval is critical to proceed as the funds would be remitted from abroad. Given the substantial amount involved, RBI approval is required for such remittance. 

Gaekwad stated that he has not received any response from RBI to date. He followed up with RBI on 11 February, requesting approval for the escrow account with proof of funds exceeding $90 million in cash and letters from Gaekwad’s US bankers certifying the balance available. 

In the ongoing litigation, the SC crystallised the central issue as the date of the public offer. Gaekwad argued the announcement made on 18 January, should be considered the official start of the open offer period. On the other hand, Religare and Burman entities contend that the date should be set to 25 September 2023, when the Burman family’s offer was initially made.

Sebi has yet to decide on this aspect, with the applicant also requesting an exemption from certain Sebi regulations as a precautionary measure. Solicitor general Tushar Mehta, appearing for Sebi, informed the apex court that a hearing was fixed on Wednesday on the exemption application filed by Gaekwad regarding his competing offer to acquire stakes in Religare Enterprises. However, after Gaekwad sought an adjournment, it was posted for 14 February. Gaekwad claimed the hearing could not take place as he had sought a virtual hearing, not an adjournment.

On 4 October 2023, the Burmans made the first public statement on their open offer. After much delay, the Burman family, which owns a little over 25% of Religare, got approvals from all regulatory agencies and announced on 18 January to buy up to 26% shares from minority investors via an open offer that opened on 27 January. It was to end on Friday, but following the hearing on Gaekwad’s appeal, the Supreme Court said the Burmans’ open offer could not be closed until Sebi decides on the legality of Gaekwad’s competing offer.

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