2024-10-25 05:30:15 :
Religare, which is embroiled in a tussle with the Burman family, did not initially act on the proposal and instead filed an application with the Insurance Regulatory and Development Authority of India (Irdai) after the Securities Appellate Tribunal (SAT) intervened. Religare operates an insurance company, Care Health Insurance.
“Irdai has no objection to this as there is no change in the effective shareholding of Care Health Insurance Ltd,” a person familiar with the matter said on condition of anonymity. Irdai has also asked Religare to seek approval from the Reserve Bank of India (RBI) because the person said Religare is a non-banking financial company (NBFC) regulated by the Reserve Bank of India (RBI).
With the Competition Commission of India (CCI) having approved the proposal, the deal now requires approval from the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) before Burmans can make a public offer for Religare.
Religare initially welcomed the Myanmar proposal last year but later pushed back, saying the public offer was too low. The matter has since degenerated into accusations and counter-allegations, including accusations that Religare chief executive Rashmi Saluja received large stock options and the proper status of a Myanmar national.
A Religare spokesman confirmed Irdai’s communication.
According to the spokesperson, Irdai said in response to its application: “…we have taken note of your submissions and have no objection to the proposed public offer of shares in REL in relation to the insurers, promoters, transferors and underwriters .The transferee shall obtain all necessary approvals from other statutory/regulatory/judicial authorities as required.”
Religare owns 63% of Care Health Insurance, which is regulated by Irdai. Religare’s ownership of Care will remain unchanged even after the Myanmarese make their bid public.
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“So far as the CHIL (Care Health) application is concerned, Irdai submitted that the public offer does not involve any transfer of CHIL shares. Therefore, the provisions of Section 6A(4)(b) of the Insurance Act, 1938 regarding registration of transfer of shares in insurance companies are not adopted. ” said a Religare spokesperson.
“It is apparent from the above that while there is no objection to the proposed public offer, it is subject to obtaining all necessary approvals as may be required from other statutory/regulatory/judicial authorities,” a Religare spokesperson said.
Care Health is Religare’s cash cow and the second largest independent health insurance company in India. The 2022 rights issue will at least value it $10,000 Crores at Rs. $110 per share.
Irdai had expressed no objection a few weeks ago but had not attached any conditions to Religare or the Burman family, the people said.
Emails sent to Irdai and Care Health remain unanswered.
Care Health is Religare’s cash cow and the second largest independent health insurance company in India. The 2022 rights issue will at least value it $10,000 Crores at Rs. $110 per share.
A Religare spokesperson said that an application for prior approval of CHIL’s share transfer has been made to the regulatory authority under Section 6A of the Insurance Act, for shares indirectly held by shareholders of listed companies (Religare). The spokesperson said Irdai told Religare that in this case, there was no need to submit a “share transfer” application.
In September 2023, the Burman family, which owns 25% of Religare, said it planned to acquire Religare through an open offer through its four associate entities VIC Enterprises Pvt. Ltd., MB Finmart Pvt. Ltd., Puran Associates Pvt. Ltd and Milky Investment and Trading Co. The Burmese acquired a majority stake in Religare at a cost of at least $34 billion rupees. The Burmese have announced a public offer $$235 per share, which alone costs $2,116 crore if the journal is fully subscribed at launch.
A Religare spokesperson said: “The acquirers have stated that the proposed transaction does not require Irdai’s prior approval as there is no transfer of shares in Care Health or MIC Insurance Web Aggregators and they have submitted relevant documents to IRDAI and Sebi in this regard, but provided Details for submitting an application are provided in case REL wishes to submit an application.”
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Care Health and the stock options it issued to Saluja have been at the center of a battle between the Burman family and Saluja, who is Care Health’s non-executive chairman, since the Burman family announced the acquisition.
After Religare’s board objected to the proposed takeover, the Burmese claimed Saluja received unusually large share options from Care Health despite Irdai’s disapproval.
In a letter in June, Care Health wrote to the insurance regulator saying that granting Esop was not “required” for Irdai’s approval. The letter was in response to a show-cause notice issued by Irdai on June 14 asking why Care Health should not be penalized for granting an ESOP to Saluja despite the regulator’s rejection.
In June, Sebi had criticized Religare’s board for delaying the public offer and directed it to file the application immediately. Religare challenged SAT, which directed Religare to file an application regarding the proposed acquisition by the Burman family.
Later, Irdai canceled Saluja’s Esops worth around $250 crore, a figure that was also challenged by the group ahead of the SAT exams.
If the public takeover goes through, the Burman family will effectively become the owners of Care Health.
Separately, Religare said in a regulatory filing that the Reserve Bank of India has refused to approve the appointment of former Delhi Police Commissioner Rakesh Asthaana to its board. The company said the Reserve Bank of India rejected the proposal on May 15 this year but failed to disclose this information as mandated by listing norms due to its busy schedule due to the proposed acquisition.
Religare said it was also considering the option of asking the Reserve Bank of India to reconsider its decision, but could not disclose such plans as it was “busy” with the “arduous task” of preparing multiple applications to the regulator regarding the acquisition. “In this rush, as the focus shifts to submission of regulatory applications etc., the issue of RBI refusing to approve Asthaana’s appointment and leaving it to RBI for rectification/reconsideration has been ignored and in this case, no The facts upon which the decision was taken were also omitted due to inadvertence and disclosure under Sebi LODR,” Religare added.
and read | Myanmar seeks to expel Saluja from Care Health ahead of annual general meeting today
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