The board of directors of Religare Enterprises Ltd (REL) joined its embattled chairwoman, Rashmi Saluja, saying she had transformed the financial services company whose market capitalization has risen to around $1 billion from less than $100 million in March 2018.
The board, which is defending itself against an open bid of Rs 2.2 billion by the Burman family, said the allegations had not only been leveled at Saluja but at the entire Religare management that has freed Religare from debt.
“Our story has been one of resurgence under the leadership of the board of directors led by Saluja, executive chairman. Religare is now at a turning point due to the tireless efforts of the last five years,” the board said in a statement issued in response to a report by Ingovern, a proxy advisory firm.
Ingovern has said that Saluja had received excessive remuneration in violation of regulations worth Rs 480 million and REL did not disclose it.
The board said a one-time deal with banks was completed through organic collections and payments of over Rs 9,000 crore were made. “Religare has now become a leading player in financial services and has enhanced value for all its stakeholders, including shareholders, employees and customers, while maintaining the highest levels of corporate governance,” said REL’s board of directors. .
The board denied that a representative of the Burman family had spoken to Saluja at a meeting on September 20 about their proposed open offer for Reiligare, a few days before the open offer was announced. Saluja is accused of selling her shares before the stock was made open.
Saluja liquidated his ESOPs (employee stock ownership plan), along with 12 other Religare employees. “This ESOP liquidation process through financing and sale was launched several days before said meeting which took place on September 20. The actual sale of shares that took place on September 21 and 22, 2023 was carried out at the price of current market.”, says the statement, adding that the proceeds from the sale of Saluja shares were used to continue investing in ESOP of an entity of the Religare Group.
Saluja was granted an ESOP worth Rs 250 crore in Care Health Insurance, a subsidiary of REL, which has an ESOP pool of 12.5 per cent of equity for its employees and another pool of 2.50 percent for Religare Group employees.
“Saluja, as an employee of REL, was granted 227,11,327 options (to purchase shares of Care) subject to the terms and conditions of the group’s plan mentioned above with an exercise price per option of Rs 45.32 per share in June. 2022.”
“As per the terms, of the above, 33.33 per cent of the options would vest within one year from the date of grant and issuance of minimum primary equity of Rs 250 crore by Care Health will be completed Additionally, two years from the grant date and two years from the grant start date, another 33.33 percent options would be granted,” the statement said.
Furthermore, no later than five years from the date of grant of options to the REL employee or listing of Care shares, the remaining 33.34 per cent of the options would vest.
“Reported remuneration includes the value of exercised ESOPs only and not unexercised ESOPs as the profit (if any) accrued only at the time of exercise of the ESOPs.”
The Care Health Insurance ESOPs were granted to Saluja in her capacity as employee/CEO and president of REL. Her ESOPs were not granted to her in her capacity as non-executive chairwoman of Care. The ESOPs were issued to Saluja in full compliance with the insurance regulator’s guidelines.
The Ingovern report says that in the last three to four years, the total valuation of options in REL and Care Health issued to Saluja has risen to over Rs 480 crore. This is in addition to the compensation paid to REL, Ingovern stated.