SEBI Targets Religare’s Rashmi Saluja Over Insider Trading Allegations Linked to Burman Family

Mumbai: The Securities and Exchange Board of India (Sebi) has issued a show-cause notice to Rashmi Saluja, the chairperson of Religare Enterprises, as part of its investigation into possible insider trading violations, according to sources familiar with the matter.

What’s the Investigation About?

The investigation focuses on trades made by Saluja on September 21 and 22 last year, just days before the Burman family announced an open offer for Religare Enterprises on September 25, 2023.

In November, four investment firms linked to the Burman family filed a complaint with Sebi, claiming that Saluja had sold 1.29 million shares worth ₹34.71 crore on September 21-22. These sales allegedly occurred after Saluja was informed by a Burman family representative on September 20 about the upcoming open offer.

Legal Actions and Allegations

Sebi issued the show-cause notice under Section 11 of the Sebi Act, 1992. This section gives Sebi the power to act against violations of securities laws, including insider trading.

Neither Sebi nor Religare Enterprises responded to emails requesting comments as of Wednesday.

In May 2024, the Burman family entities made further allegations, claiming that Saluja sold 2.71 million shares worth ₹43 crore between March 26 and 28, while allegedly having access to undisclosed, price-sensitive information.

Recent Developments

Last week, the Enforcement Directorate conducted searches at several locations linked to senior executives at Religare Enterprises, including Saluja. They seized various documents, including employee stock options from the company’s subsidiary, Care Health Insurance.

In July, the insurance sector regulator fined Care Health Insurance ₹1 crore and ordered the company to buy back 7.66 million shares that had been allotted to Saluja. The regulator also prohibited the company from granting stock options to Saluja as a non-executive director. However, this order was temporarily halted by the Securities Appellate Tribunal.

Further Complications

Also in July, the tribunal ordered Religare Enterprises to submit the Burman family’s open offer application to financial regulators and comply with necessary approvals. This order followed an appeal by Religare Enterprises against a Sebi directive that questioned why action should not be taken against Saluja and the company’s management for not cooperating with the Burman family’s open offer.