Religare chief Rashmi Saluja ceases to be director after AGM vote, RBI clarifies no reappointment

In a setback to Religare Enterprises Ltd Executive Chairperson Rashmi Saluja, the company has informed that she ceased to be the director of the company after a vote at its Annual General Meeting (AGM) on February 7, 2025, due to her failure to receive requisite votes on the resolution for her re-appointment. The company confirmed her cessation following a regulatory clarification from the Reserve Bank of India (RBI).

Religare cited a report by the Scrutiniser, saying the number of votes cast against the resolution of her reappointment of Saluja as executive chairperson was 97%, leading to her exit from the Religare board.

The company is a Non-Banking Finance Company (NBFC) and is governed by the Reserve Bank of India (“RBI”) regulations, besides the market regulator Securities and Exchange Board of India (“SEBI”) as it is a listed entity.

In this regard, Religare says it had sought clarification from the Reserve Bank, seeking guidance on the applicability of the aforesaid Regulation on whether prior permission will be required in the instant case, the response of which is received today i.e. February 13, 2025.

Under intense scrutiny and facing mounting legal challenges, Rashmi Saluja presided over the company’s 40th Annual General Meeting (AGM), addressing the firestorm of allegations that have engulfed the company in recent months.

The meeting, held via video conferencing, took place against the backdrop of an intensifying takeover battle by the Burmans, amid allegations of financial misconduct.

The meeting was expected to be a high-stakes affair given that in a surprising move, Saluja had removed the agenda item related to her reappointment, asserting that she had already been appointed as chairperson until 2028, rendering the vote unnecessary. Proxy advisory firms had earlier recommended "against her reappointment" over governance concerns.

During the AGM, Saluja had categorically rejected allegations of financial wrongdoing, insisting that her management team had rescued Religare from collapse and restored its reputation in the financial sector. “The entire turnaround of six years got converted into a murky battle between four acquirer companies versus the management. And the management was chosen and picked to get the brunt of the open offer. The entire hard work of six years is being tarnished,” she said.

It remains to be how the cessation of Dr. Rashmi Saluja as Executive Chairperson will impact US-based investor Digvijay 'Danny' Gaekwad's efforts to acquire a substantial stake in Religare against the Burman family's bid.