InGovern, a proxy advisory firm, has advised shareholders to vote against the re-appointment of Rashmi Saluja as Director of Religare Enterprises for putting the company and its subsidiaries in the cross hairs of regulators.

The company’s annual shareholders meeting will be held on December 31. Besides adoption of accounts and appointment of statutory auditors, the Board is seeking shareholders’ approval for re-appointment of Saluja for five years.

InGovern has raised its concern over the ₹69 core remuneration paid to Saluja in FY’24 and felt it was significantly higher compared to peers in the BFSI sector. Saluja is currently the executive chairperson of Religare Enterprises.

Insurance Regulatory and Development Authority had issued an order requiring Religare Enterprises subsidiary Care Health Insurance (CHIL) to buy back Employee Stock Options granted to Saluja and imposed a fine of ₹1 crore on CHIL.

Additionally, CHIL was directed to seek prior approval from IRDAI for any remuneration decisions related to board members.

An RBI inspection had revealed significant concerns about the financial position of Religare, leading to supervisory letters that highlight compliance issues, said InGovern.

An ex-parte order from SEBI was issued against Religare and its directors, including Saluja, for alleged violations of securities regulations. This order indicates serious regulatory non-compliance, it said.

Potential mismanagement

RBI also expressed concerns regarding the creditworthiness of borrowers in Religare’s Corporate Loan Book, with significant provisions made against this portfolio. This indicates potential mismanagement of financial risks under her leadership, said InGovern.

Saluja is a member of both Audit committee and Nomination & Remuneration committee. As a governance best practice, it added NRC should consist of only Independent Directors to ensure complete independence in audit oversight and fixing of managerial remuneration.

The ongoing scrutiny of Religare raises questions about the effectiveness of governance under her leadership which reflects poorly on her oversight and governance capabilities.

There are also concerns about her compensation practices and adherence to regulatory guidelines regarding executive remuneration, said InGovern justifying its suggestion to shareholders to vote against her re-appointment.

The Burman family of Dabur holds 25 per cent stake in Religare and has announced intention to acquire an additional 26 per cent stake under the takeover code in September last year. Religare’s management, led by executive chairperson Rashmi Saluja, had initially welcomed the plan before turning against it.

Early this month, RBI has approved the Burman family to make an open offer for an additional 26 per cent stake in Religare Enterprises.