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Mumbai: In further trouble for ReligareEnterprises Chairperson Rashmi Saluja, the Enforcement Directorate (ED) is poised to register a money laundering case related to the Religare-Burman takeover dispute. According to officials, the ED is set to file an Enforcement Case Information Report (ECIR) against Saluja, Group CFO Nitin Agarwal, President and General Counsel Nishant Singhal, and the complainant Vaibhav Gawli under the Prevention of Money Laundering Act, 2002 (PMLA). This action follows a first information report (FIR) lodged by the Mumbai Police on September 6, based on the ED’s complaint.
The ED’s allegations are serious, claiming that the accused secured benefits totalling Rs179 crore by acquiring Employee Stock Ownership Plans (ESOPs) at substantially reduced prices. The ED has also accused Saluja of filing a case against Dabur Group Chairman Mohit Burman and his family to obstruct the proposed takeover of the company and its subsidiaries, thereby concealing the illegal gains accrued from the acquisition of ESOPs in Care Health Insurance Limited (CHIL). Additionally, the complaint claims that funds from REL were diverted to participate in a rights issue of CHIL, allegedly facilitating these financial gains.
According to officials, the ED will issue summon Saluja and other executives from Religare Enterprises to join the probe next week.
In response to an email sent by The Free Press Journal seeking comments, Religare stated that the concerned officials have denied the allegations made in the FIR and are currently examining the matter to determine further action. They emphasised that there are no allegations against the company in this matter.
The FIR was filed in November 2023 by shareholder Vaibhav Gawli, accusing the firm’s former directors and the Burman family, who are shareholders in Religare Enterprises. The ED alleges that this complaint was false and part of a scheme, directed by Saluja and other private individuals, to block a change in REL’s ownership to the Burmans. The FIR was also part of a broader conspiracy to obscure illegal gains from stock options in Care Health Insurance Limited. The complaint aimed to divert attention from these illegal activities.
During the ED’s investigation based on Gawli’s complaint, it was found that Gawli was accused of filing a false complaint and an additional accused was identified. When the ED recorded Gawli’s statement on August 12, he allegedly denied having documentary proof to support his claims of a takeover bid. Gawli claimed that the details in his case were based on alleged instructions from Saluja.
Furthermore, Gawli asserted that Saluja, Agarwal and Nishant had given him Rs1.2 lakh to purchase 500 shares of REL and Rs80,000 to file a complaint against the Burmans. The FIR, recorded under Section 50 of the PMLA, noted that the ED analysed Gawli’s account and found evidence supporting his claims of receiving money. Gawli also admitted to being aware of Saluja’s alleged diversion of funds through ESOPs from Religare Enterprises and stated that the complaint was intended to preserve his benefits, which might have been jeopardised by a potential takeover by the Burman family.
During the investigation, ED recorded the statement of Mohit Burman, Chairman of the Dabur Group. According to officials, Burman alleged that Religare’s management attempted to obstruct a proposed takeover of the company and its subsidiaries to conceal illegal gains. He also reported that the Burman Group had filed a complaint with the Securities and Exchange Board of India against Religare Enterprises, alleging non-cooperation with their open offer. Additionally, Burman informed that the Burman family, which holds over a 25% stake in Religare, possesses veto rights on special resolutions at the financial services firm.
The FIR details that after the IRDAI rejected an initial ESOP grant request, the CHIL board approved a second grant of 2,72,11,327 shares to Saluja at Rs 45.32 per share on August 2, 2022. These ESOPs were set to vest in three equal tranches. At the same meeting, a rights issue was proposed to raise up to Rs 300 crore by issuing 2,72,72,727 shares at Rs 110 each, which Saluja proposed on behalf of REL and was accepted by CHIL’s board.
The ED has classified this as unlawful gains, alleging that REL’s funds were used to buy shares at the inflated price of Rs110 to meet ESOP vesting conditions, while the ESOPs were granted at a significantly lower rate. The rights issue, held from August 24, 2022, to September 29, 2022, saw REL invest Rs192 crore out of Rs250 crore raised, with Saluja and Aggarwal as key decision-makers. It remains unclear if REL’s shareholders approved this investment.
