Religare Enterprises withdraws NCLAT petition against CCI order

New Delhi: Religare Enterprises has withdrawn its appeal at the NCLAT against a competition watchdog CCI order that allowed four Burman group entities to acquire a 5.27 per cent stake in the financial services firm.

The move comes after the Burman Family, through its investment firms, gained a controlling stake in Religare Enterprises Limited (REL) after acquiring 25.16 per cent of equity shares through an open offer.

The total holding of Burman family, which also owns FMCG firm Dabur and Eveready, now exceeds 50 per cent, consolidating their position as the largest shareholders in the company.

During the proceedings, the "authorised signatory for Appellant (Religare) is present and submits that he is under the authorisation to say the Appellant is not interested in pursuing the matter and intends to withdraw this appeal", the NCLAT order said.

"In view of this, the appeal stands dismissed as withdrawn. All the pending applications are also disposed of," a two-member bench ordered last week.

The four Burman family-owned entities, which were made parties before the NCLAT are - Puran Associates Private Limited (PAPL), VIC Enterprises Private Limited (VIC), MB Finmart Private Limited (MFPL) and Milky Investment & Trading Company (MITC).

In February, Religare Enterprises executive chairperson Saluja was ousted as director by the company's shareholders, following the Burman family acquiring a controlling stake in the company.

Subsequently, the board has also directed subsidiary companies to initiate the process for the removal of former executive chairperson Rashmi Saluja from their respective companies.

Religare Enterprises, under the regime of its then (former) Chairperson Rashmi Saluja, had challenged the order of the Competition Commission of India (CCI), which in January 2024 approved the acquisition of 5.27 per cent of the investment and financial services holding company by the four Burman Group entities from the open market.

Challenging this before the National Company Law Appellate Tribunal (NCLAT), an appellate authority above CCI, Religare Enterprises had contended that no notice under Section 6(2) of the Competition Act was given prior to purchase.

It was given after the acquisition and non-issuance of the Notice under Section 6(2) of the Act on the 4th acquisition was never considered by the CCI.

However, Burman had contended that a notice under section 6(2) and the Commission was only required to see if such a combination would adversely affect the competition or not.

During the argument of the appellant, there was never a single whisper as to how the combination would lead to dominance or would adversely affect the competition.

Section 6 (2) of CCI the Competition Act, 2002 says any person or enterprise, who or which proposes to enter into a combination, shall give notice to the Commission, disclosing the details of the proposed combination, within 30 days of approval of the proposal relating to merger or amalgamation and execution of any agreement or other document for acquisition.