The Securities and Exchange Board of India (SEBI) has levied a significant penalty against Rashmi Saluja, the former Executive Chairperson of Religare Enterprises Ltd. (REL), for engaging in insider trading. Saluja has been directed to disgorge unlawful gains totaling Rs 1.99 crore, along with interest, and faces an additional monetary penalty of Rs 40 lakh.
The ruling stems from an investigation into trades executed by Saluja in REL shares while she was allegedly in possession of Unpublished Price Sensitive Information (UPSI). This information pertained to an impending open offer for a 26% stake in REL by the Burman family, announced in September 2023.
Details of the Insider Trading Allegations
SEBI's probe, initiated after a complaint from investment firms linked to the Burman Group in November 2023, focused on the period between September 8 and September 25, 2023. During this time, the proposed open offer was not yet public. As a Key Managerial Personnel of REL, Saluja sold 12.93 lakh shares of the company on September 21 and 22, 2023, realizing approximately Rs 34.7 crore.
According to the regulator, these trades enabled Saluja to avoid losses amounting to Rs 1.99 crore. This avoidance occurred because REL shares declined significantly following the public announcement of the open offer on September 25, 2023. The stock closed 6.85% lower on the announcement day and fell another 3.08% in the subsequent trading session.
Evidence and Saluja's Defense
SEBI's investigation utilized a range of evidence, including WhatsApp chats, call detail records, meeting schedules, and hotel invoices. These materials reportedly established Saluja's access to the UPSI prior to the open offer's public disclosure.
Key evidence cited includes meetings on September 20, 2023, between Saluja, Dabur Chairman Emeritus Dr. A.C. Burman, and Burman Group representative Arjun Lamba. Dr. A.C. Burman, in an affidavit, stated that Saluja was informed of the Burman family's intent to launch the open offer on September 25 during this meeting. Arjun Lamba corroborated this, stating Saluja was apprised of the plan to acquire control of REL.
Furthermore, WhatsApp exchanges dated September 25, 2023, showed Saluja allegedly sharing drafts of REL’s press release regarding the open offer with Lamba before the information was formally disseminated to stock exchanges.
In her defense, Saluja denied all allegations, asserting that her trades were executed after obtaining mandatory internal pre-clearance approvals. She claimed the share sale proceeds were intended to fund the exercise of employee stock options (ESOPs) in Care Health Insurance, an REL subsidiary. Saluja maintained she only became aware of the open offer on September 25, 2023, when it was publicly announced, and suggested the complaint was motivated by an ongoing corporate control battle over Religare Enterprises.
However, SEBI concluded that Saluja traded in REL shares while in possession of UPSI, thereby violating insider trading regulations under the SEBI Act and the Prohibition of Insider Trading (PIT) Regulations.