Saluja ousted from board of Religare

MUMBAI: Religare Enterprises chairperson Rashmi Saluja, who opposed the influential Burman family shareholders’ in their attempt to take over the financial services company, was ousted on Thursday. This came after the RBI clarified that its prior consent was not needed for her removal from the board. Saluja’s departure marks the end of a seven-year tenure during which she played a crucial role in rescuing the financial services company from insolvency.

Praveen Kumar Tripathi, an independent director of the firm, has been appointed as the new chairman.

Despite shareholders overwhelmingly rejecting Saluja's reappointment as director with a 97% vote against her, the company had gone ahead and sought RBI's guidance on management changes, given its status as a core investment company (CIC).

CIC regulations stipulate that RBI's prior approval is necessary when leadership changes affect over 30% of the board composition, excluding independent directors.

Following RBI's response on Thursday, Religare announced the cessation of Saluja's directorship. The company also stated that directors would serve as chairpersons on a quarterly rotation basis, with Tripathi holding the position until June 30.

After the shareholders' rejection, Saluja had approached the Delhi high court, contending she was not due for retirement. Her petition noted that in 2020 Religare had obtained RBI's approval for her three-year tenure without rotational retirement conditions. Despite RBI's consent, the company erroneously documented her position as subject to rotational retirement, contradicting Section 196 of the Companies Act.

She was subsequently reappointed for five years from February 26, 2023, to February 25, 2028. However, Religare once again incorrectly recorded her position as subject to rotational retirement. Saluja’s petition pointed out that although she had a fixed-term appointment, Religare's January notice to shareholders included a proposal for her position's appointment, incorrectly assuming she was required to retire by rotation and seek reappointment.

The decision regarding Saluja's tenure coincides with Indian-American investor Danny Gaekwad's appeal to Sebi and the Supreme Court to reconsider his open offer proposal for Religare.
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