In an interesting turn of events, Mumbai police have registered a First Information Report (FIR) against senior management of Religare Enterprises, including its Executive Chairperson Dr. Rashmi Saluja and others. As per latest updates, the FIR has been filed under sections 420 (cheating) and 120B (criminal conspiracy) of the Indian Penal Code, following a complaint by the Enforcement Directorate.
The complaint pertains to unsubstantiated claims that were allegedly made against Burman brothers by Religare executives. Burman family owns a significant stake in Religare and had previously made an open offer to purchase additional shares from public holders.
Details reveal that ED carried out searches last month at offices linked to Religare top brass including Dr. Saluja, and collected important documents related to the case. This comes after a previous FIR was registered regarding suspected fund misappropriation at Religare's lending arm.
With senior management now facing legal charges, it remains to be seen how Religare addresses this serious development. Investors would hope the company undertakes a thorough internal audit to ensure past management lapses are not repeated, so as to rebuild lost trust. The outcome could also impact ongoing arbitration proceedings between the two shareholder groups.
More legal clarity is awaited on the nature of allegations in question and their validity. In the meantime, this serves as a reminder for corporates to exercise due diligence before making any material claims that could attract investigation under relevant laws. Reputational damage must be avoided by all means for long term sustainability of business operations.
