In Mumbai, the Securities and Exchange Board of India (Sebi) has said “no” to Indian-American investor Digvijay ‘Danny’ Gaekwad’s proposal to buy 55% of Religare Enterprises, a financial services company. Sebi decided this because Gaekwad couldn’t show enough proof that he had the money to make the offer.
This decision helps the Burman family, who own Dabur, as they aim to take control of Religare. Sebi believes Gaekwad’s application wasn’t serious and seemed to be just an attempt to disrupt the Burmans’ plans. Gaekwad wanted to offer ₹275 a share, which is higher than the Burmans’ ₹235 offer, but he needed to show he had ₹600 crore in a bank account for the deal. Since he couldn’t do that by the deadline, Sebi had doubts about his financial capability.
Sebi pointed out that allowing Gaekwad’s offer without proof of funds could upset the market. The Burmans are currently the largest shareholders of Religare, holding over 25% of the company. Rashmi Saluja, who had opposed the Burmans, has been removed as chairperson.
Sebi also raised questions about the research done by PL Capital Markets, the banker associated with Gaekwad. They seemed unprepared during the hearing and didn’t check Gaekwad’s background properly.
Gaekwad missed an important virtual meeting with Sebi, and the Burmans’ offer recently closed with around 231,025 shares submitted. If Sebi allows Gaekwad’s offer, it would mess up the market for those who already agreed to the Burman Group’s deal. Sebi concluded that the Burmans’ public announcement was made on September 25, 2023, not later, as claimed by Gaekwad. The rules state a competing offer must be announced within 15 working days after another offer is made.
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