In a show of confidence and support for Care Health Insurance, Kedaara Capital, the largest shareholder of the insurance company, on Monday (November 27) expressed its backing for the current management and affirmed its support for the decisions made by the board.

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Sunish Sharma, Founder and Managing Partner of Kedaara Capital, issued a statement commending Care Health Insurance for maintaining the highest standards of governance, compliance, and operational excellence.

He highlighted the company's best-in-class management team and emphasised the pivotal role played by the robust board in guiding the company. Care Health Insurance Ltd (CARE) is a subsidiary of Religare Enterprises Ltd (REL).

"Kedaara is a proud shareholder of Care Health Insurance. Led by a best-in-class management team and guided by a strong board, the company has always had the highest standards of governance, compliance and operational excellence. We look forward to continuing to support it as it goes from strength to strength," Sharma said.

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This comes after proxy advisory firm InGovern Research raised a red flag against Religare Enterprises alleging the "vested interest" of its chairman Rashmi Saluja due to excessive remuneration as well as regulatory breaches.

In the last 3-4 years, the total valuation of the options of Religare Enterprises Ltd and its subsidiary Care Health Insurance to Saluja is over Rs 480 crore, which is in addition to the compensation paid at REL, according to a report from InGovern.

Shares of CARE were issued to Saluja through ESOPs, despite rejection from the Insurance Regulatory and Development Authority of India (IRDAI) — further, no approval was taken for that from the shareholders of REL, said InGovern in its report. Moreover, there was "no disclosure of CARE ESOPs in REL annual report as part of Saluja’s compensation," it added.

Refuting the charges, Care Health Insurance Independent Director Pratap Venugopal said, "ESOPs were granted to Rashmi Saluja only in her capacity as employee/executive director and chairperson of REL. The ESOPs were not to be granted to her in her capacity as non-executive chairperson of Care Health Insurance."

The IRDAI (Remuneration of Non-Executive Directors of Private Sector Insurers) Guidelines 2016 do not require any permission from the authority for the grant of the specified ESOPs to Rashmi Saluja since the remuneration to the chairman of the board can be decided by the board of directors, he said.

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A total of 1.05 crore options of REL have been granted to Saluja since her appointment in February 2020 as executive chairperson of the financial services holding company, which is valued at over ₹230 crore at present. While CARE, where Saluja is a non-executive chairperson has "excessive grants of stock options," which are valued at over ₹250 crore, the InGovern report added.

Earlier, the Burman family, which has made an open offer for REL, approached the Securities Exchange Board of India (SEBI) through its entities, seeking a probe into the sale of shares by Saluja on September 20, 2023, when they informed about the open offer.

Religare, however, refuted the allegation of Saluja selling shares after being made aware of the open offer, saying the chairperson had sold ESOPs after a long process that was triggered several days prior to the September 20 meeting. Burman family entities, which now collectively hold 21.24% of REL, have written to the SEBI regarding this also.

The Burman family, a promoter of Dabur India and other entities such as Eveready Industries, through its entities, had in September announced a ₹2,116-crore open offer to the shareholders of REL to acquire up to 26% stake in the company. Earlier, the independent directors of the REL raised red flags alleging fraud and other breaches by Burman family entities.

(Edited by : Shoma Bhattacharjee)

First Published:Nov 27, 2023 6:42 PM IST