The Religare management is fighting a battle on multiple fronts. While the Burmans have made an open offer, regulators and enforcement agencies have been issuing notices to it. Rashmi Saluja, executive chairperson, Religare Enterprises, tells FE that the good performance under the current management should be a good indicator of its sincerity. Excerpts:
The ongoing conflict between the management and Burmans is not helping the company and shareholders. What is the way forward?
Running the company is in my hands, which I am doing. So for me, it is business as usual. The only thing is that whether shareholders want to support the company or not.
But this question should rather be asked to the Burmans. Till the regulators arrive at a decision, this management will be running the organisation. It is our collective responsibility to ensure that the company and shareholders don’t lose out.
We have had the best year. We definitely need the support of each and every investor, shareholder and the management. So, I think that it will be best for them to keep supporting the company and let it flourish.
But is there a threat of the company becoming a collateral damage?
While wanting to take the company, they should ensure that it does not become a collateral damage. As for the business growth, we have a five-year plan in place in sync with how we want to unlock the value we’ve created within the company. Whatever the issues are, we will be very happy to provide answers at the appropriate forum – whether it is the agency level, or the regulatory level.
I’m not fighting, just holding my ground, have nothing to defend.
What do you think was the trigger for the largest shareholder to go against the management? Like you said, the Burmans have been supportive over the past six years.
I take it as a compliment because they really believed in this management. We ensured that the share price of the company rose from Rs 17 to Rs 300 through our hard work. But now, they are proposing to take over the company without a concrete plan.
What perplexes us is that if the person was good enough to run the company, they should have allowed the company to continue working in spite of the open offer. Instead, they are accusing the management of wrongdoings. At the same time, they kept voting and agreeing with every resolution of the same management. Why didn’t they write to the regulators earlier or challenge our decisions legally. So, it is mystery for us as well.
Why was the AGM postponed to December? Are there chances of it being postponed further?
The AGM was pushed because any material change in the shareholding pattern would actually give more clarity. These things happen all the time. The board decided that we should wait until there is clarity from the regulators, as the decisions should not be biased.
As of now, the AGM will happen by the end of the year. We feel that once there is clarity (regarding the Burman’s open offer), we will be more comfortable with the situation.
Has there been any communication from the regulators on the status of the open offer?
The Reserve Bank of India (RBI) is yet to revert. We believe that whatever decision it takes will be in the interest of the organisation, not in the interest of certain groups.
What if the Burmans decide to exit by selling their stake?
If they want to sell their shares after going through all this trouble, the company still progresses, and there are a lot of interested people who have shown huge interest in acquiring their shares.
Six years ago, no one was willing to come on the board or stick their neck out as the company was in a mess. Yet, shareholders believed in us. Today, we have a proven track record. All the four companies are doing extremely well. Now, the DNA of the organisation is so strong that it will survive and grow irrespective of people.
Are you on the lookout for any big or potential investor to strengthen the management?
Based on our performance, we have huge interests from a lot of people from the country as well as overseas who would definitely be very happy to collaborate once the confusion ends.
Even during this period, we have not let the share price suffer. So, they know that if a company is still doing well under such stressful circumstances, it will continue to do well or even better if things improve.
We are not sitting across the table to discuss this right now because the time is not not ripe for that. But, I am very confident that the company’s strength will attract a lot of good investors.
If the open offer does go through, how will things change?
When the final decision comes, it will for the best of the company. Neither am I indispensable, nor is the management. But till the time I am here, I will continue doing the work that I have been doing.
Currently, they are so busy fighting us that one wonders whether they have a business plan in place, and if or when they will acquire the company. They are assuming since they are a far more established player, they will make things work. But they have no track record of running a non-banking finance company.
In fact, since the past year, the Burmans have not spoken to us. We found out about the open offer through the media. They have not communicated to us either in individual capacities or through the board.
From: financialexpress
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