The Securities and Exchange Board of India has issued a show cause notice to Religare Enterprises chairperson Rashmi Saluja in connection with its investigation into alleged violations of insider trading regulations, people familiar with the matter said.
The investigation centres on trades conducted by Saluja last year on September 21 and 22, days before the Burman family’s open offer for Religare Enterprises was announced on September 25, 2023.
In November last year, four investment firms associated with the Burman family filed a complaint with SEBI, alleging that Saluja sold 1.29 million shares worth ₹34.71 crore on September 21-22, after being informed by a Burman family representative on September 20 about the open offer plan.
The letter to SEBI followed a communication to Saluja and the Religare board, where the Burman family firms alleged that she had sold the shares after meeting with their representative.
SEBI has issued the show cause notice under Section 11 of the SEBI Act, 1992, which grants the regulator authority to take action against securities law violations, including insider trading, the people said.
SEBI and Religare Enterprises did not respond to emails seeking comment till press time Wednesday.
In May 2024, the Burman family entities again alleged that Saluja sold 2.71 million shares worth ₹43 crore between March 26 and 28 this year while in possession of undisclosed price-sensitive information, also in violation of the insider-trading regulations.
Last week, the Enforcement Directorate conducted searches at multiple locations linked to senior executives at Religare Enterprises, including Saluja, and seized several documents, including employee stock options granted by the company’s Care Health Insurance subsidiary.
In July, the insurance sector regulator imposed a ₹1 crore penalty on Care Health Insurance and ordered the insurer to buy back 7.66 million shares allotted to Saluja within a month. It also prohibited the company from granting stock options to Saluja as a non-executive director. However, the Securities Appellate Tribunal stayed the regulator’s order.
In the same month, the tribunal directed Religare Enterprises to submit the Burman family’s open offer application to financial regulators and comply with statutory approval requirements. This directive followed an appeal by the company against a SEBI order questioning why action should not be taken against Saluja and the Religare Enterprises management for non-cooperation in the Burman family’s open offer.
