The shareholders of Religare Enterprises have voted against both the company’s proposal to invest in its subsidiary MIC Insurance Web Aggregator and the proposal changes to the Article of Association.
- Also read:All disclosures on MIC investment made: Religare Enterprises
With regards to the process initiated for getting shareholders approval through e-voting for the special resolutions, the company in a statement said on basis of the scrutiniser report received the votes polled in favour of the special resolutions could not cross the requisite threshold required for approval and the same has been defeated.
Of the overall investors of 62 per cent of the outstanding shares who participated in the voting process, 74 per cent were against the proposed investment in MIC.
Though 68 per cent of investors who polled have favoured the amendment to the Article of Association, the scrutiniser said 14 members holding 6.98 crore shares abstained from voting and one member voted less by 2.07 lakh shares than he held.
Hence, the scrutiniser did not consider voting on these shares as valid votes, said the report.
The company was seeking shareholder’s approval to invest up to ₹15 crore in MIC, along with ratification of a past investment made in December, 2023.
However, proxy advisory firm InGovern has recommended shareholders of Religare Enterprises to vote against the resolution proposing an investment in MIC. InGovern has raised questions over the rationale of the deal citing lack of disclosures, details and absence of any co-relation with the overall core business of REL.
InGovern has highlighted that REL is already undergoing an uncertain phase and a regulatory probe. Further, as there is an imminent change in promoters and management which may take place post the takeover by the Burmans, the proposed investment must be kept at bay at this juncture, it said.
InGovern emphasised that the proposed investment amounts to a wrong capital allocation at a time when there are significant upcoming payables in the form of loans and existing capital that must be deployed in its core business. Therefore, the proposed acquisition does not fit in REL’s overall core business and amounts to wrong capital allocation, it said.
- Also read:InGovern against Religare Enterprises’ investment in MIC
The amendment to Article of Association was to delete the provisions in the Shareholders Agreement that was entered between Religare Enterprises and erstwhile promoters Malvinder Mohan Singh, Shivinder Mohan Singh and others.