Rashmi Saluja, executive chairperson of Religare Enterprises Limited (REL) acquired a stake of around 8 per cent in the company’s wholly owned shadow bank Religare Finvest Limited (RFL) through an Employees Stock Option Plan (ESOP) award. This came a day after the largest shareholder of the company, the Burman Family announced an open offer to buy additional shares for the control of the conglomerate.
The report by ET also revealed that the value of ESOP award in the company is imputed to be in the band of Rs 150–260 crore. A proxy advisory firm InGovern Research, in November last year, valued the stock options of REL and its subsidiary Care Health Insurance Limited issued to Saluja over last 3–4 years at over Rs 480 crore. Add to it the award in RFL, the total compensation via ESOPs earned by her can range between Rs 630 crore and Rs 740 crore. The compensation including Saluja’s annual salary makes her the highest paid executive in the history of Indian corporates.
Burmans and Religare board drawn in a battle for the control of the conglomerate, approached the regulators against each other. While the board, led by Saluja, argued that the Burmans are unfit to take over the financial services company, the Burmans accused Saluja of insider trading and abuse of power to get unrestrained remuneration. Both the parties have denied the allegations.
The acquisition of an 8% stake in RFL via stock grants happened on September 26. Just a day earlier, the Burman Family announced their open offer for more shares in Religare at Rs 235 per share which faced rejection by the board. The Burmans on the other hand alleged that stock grants issued to Saluja broke takeover rules.
During the annual general meeting of RFL, the ESOPs were approved as part of “special business”.
The documents reviewed by ET reveal that RFL resolution was put to vote and passed by show of hands. The granting of the ESOPs was not disclosed to REL shareholders. During the REL’s AGM held on September 27, a resolution reappointing Saluja as chairperson was approved. The AGM notice which was issued to REL shareholders on September 5 had no mention of any proposed ESOP issuance to Saluja by RFL even when the notice for the RFL AGM was issued on September 1. This was opposed to the claims made by her office.
