**Dabur Chairman Seeks Clarity on Religare’s Share Recovery Issue**
In a significant development five months after Mohit Burman, chairman of Dabur India Ltd, assumed control of Religare Enterprises Ltd, a proxy advisory firm has requested an update regarding the recovery of shares valued at ₹480 crore from former Religare chair Rashmi Saluja.
On Sunday, InGovern Research Services issued a note urging Religare and its subsidiary, Care Health Insurance, to provide information and updates concerning the employee share options (ESOPs) awarded to Saluja. The Bengaluru-based advisory firm also called for the recovery of fees paid to former independent director Pratap Venugopal, who had provided legal counsel to Care Health.
In response, Religare stated, “The Insurance Regulatory and Development Authority of India (IRDAI) issued an order deeming the issuance of ESOPs to Dr. Saluja as illegal. Care Health Insurance Limited had filed an appeal with the Securities Appellate Tribunal (SAT) under Dr. Saluja’s direction when she was the non-executive chairperson. Following her removal from the board, the company’s board decided to withdraw the appeal, which is now officially retracted. We will not comment further as these matters are under internal review.”
Saluja was granted ESOPs representing approximately 2.5% of Care’s share capital, with over 80% of the insurance firm’s ESOPs allocated to her. InGovern has raised concerns regarding potential conflicts of interest involving Venugopal, who was both an independent director and an advisor on the ESOPs, suggesting that his dual role was not adequately disclosed to shareholders.
According to InGovern’s report, the Nomination and Remuneration Committee, responsible for approving compensation and stock options, lacked independence due to Venugopal’s involvement. Shriram Subramanian, managing director of InGovern, emphasized that such dual roles could lead to conflicts of interest if full disclosures are not made.
In response to the allegations, Venugopal described InGovern’s note as “motivated,” “malicious,” and “factually incorrect,” clarifying that while he was a partner in the law firm that assisted Care Health, he was not the principal legal advisor. He stated, “The law firm M/s. K J John was primarily responsible for legal advice to REL, and my role was misrepresented.”
This ongoing situation highlights the complexities surrounding corporate governance and the importance of transparency in the management of employee share options and board decisions.
**FAQ**
**What are the implications of the ESOP controversy for Religare?**
The controversy surrounding the ESOPs could impact Religare’s corporate governance reputation and investor confidence, emphasizing the need for transparency and accountability in board decisions.