Danny Gaekwad goes for diplomatic intervention in Religare open-offer wrangle

The ongoing Religare Enterprises takeover controversy is now taking a political hue with the Florida-based businessman and US investor Danny Gaekwad escalating the matter at a diplomatic level. Frustrated by the lack of response from Indian regulators, Gaekwad has raised the issue with Florida Senator Rick Scott, and it is now expected to be discussed with Indian Prime Minister Narendra Modi during his proposed visit to the US on Feb 12-13.

“I am seeking fairness and justice from Senator Rick Scott, and the issue will be raised at the diplomatic level when Prime Minister Narendra Modi visits the US. The issue will be formally put on official records of the Senate and is not an off-the-record intervention,” the 65-year-old told Fortune India, adding that Marco Rubio, President Donald Trump’s Secretary of State nominee, too, will be appraised about the case.

Gaekwad, who is looking to acquire a controlling 55% stake in Religare Enterprises, had earlier sought an exemption from certain timeline-related conditions according to Sebi’s takeover code. However, the markets regulator turned down his request on the grounds that it was not made within the stipulated time period after the Burmans, who already own 21.54% of the financial services firm, made their open offer for an additional 26% stake.

Gaekwad’s diplomatic move comes even as the Supreme Court on Friday allowed his company, Development and Investments, to present its counter-open offer to acquire a controlling stake in Religare. The open offer deadline has been extended to February 12 from February 7, subject to the US-based company depositing a cash or bank guarantee of ₹600 crore. “We will be meeting the requirement stipulated by the Supreme Court in a day or two,” Gaekwad said.

Even as the apex court’s decision has come as a shot in the arm for the US investor, Gaekwad is sore about the treatment meted out to him. “If someone wants to invest in India and is made to go through legal hoops citing technicalities, it can be a very frustrating experience. The fact that I had to knock on the doors of the highest judicial authority for investing in a listed company is a telling commentary on why India can be a tough market to invest in,” he said.

Gaekwad has attempted multiple times to engage with Indian regulators regarding his bid. “I have fulfilled every regulatory requirement but still got a raw deal. If PM Modi wants investors to invest in India, especially non-resident Indians who remit huge sums back to their motherland, the time is now,” Gaekwad said.

While the US businessman has conformed to all Sebi conditions, including appointing a merchant banker and opening an escrow account, the controversy could just stoke the growing concerns by the US on fair treatment by India on trade and investment-related issues.

Though the stock is up 4.5% over the past five days at ₹253.50, it is down nearly 9% year-to-date.