Religare Enterprises, a financial services firm, has disclosed that the Reserve Bank of India (RBI) turned down its application to appoint Rakesh Asthana as its whole-time director in May this year without citing any reasons.
Asthana is a former top official of the Central Bureau of Investigation (CBI).
In a notice to the stock exchanges, Religare said that while the company and Asthana were weighing the options of dealing with the letter of refusal by the RBI, it was also busy in preparing for the “herculean task” of making ready multiple applications to regulators.
“In this rush and with the focus shifting on filing regulatory applications etc. the issue of refusal of approval by the RBI for appointment of Asthana being taken up with the RBI for redressal/reconsideration got missed and in this state of events, the fact of not making the disclosure under the Sebi LODR was also missed due to oversight,” the company said.
The company said Religare is currently an acquisition target and an open offer was made by the Burman family (of Dabur group) on September 25 last year.
The committee of the independent directors and the company had raised various concerns regarding the acquirers and its promoters, directors etc. which were forwarded to the Securities and Exchange Board of India (Sebi) with a request to conduct a detailed investigation.
The company said Asthana has nearly 13 years of experience overseeing financial crime investigations at the CBI and oversaw inquiries into significant banking, insurance, and other financial frauds, during which he acquired extensive knowledge and expertise in the regulatory frameworks of the financial sector, as well as the operations and intricacies of banking systems and insurance companies.
Asthana, the company said, superannuated as the police commissioner of Delhi in July 2022 and earlier served the nation as Chief of Border Security Force (BSF), Director General of the Bureau of Civil Aviation Security (BCAS), Director General of Narcotics Control Bureau (NCB).
“The experience of Rakesh Asthana has been taken into account while inducting him in the company by the Nomination and Remuneration Committee of the board,” it said.
“Considering that his expertise can be harnessed better by the company which has suffered on account of fraud perpetrated by the erstwhile promoters and has been brought back on the rails by the present management, it was decided to bring him on to the Board of REL as an Additional Director (designated as a whole time director).
"Accordingly, based on the NRC's recommendation, the Board approved the proposal for his appointment on November 2 last year subject to approval of the RBI and the shareholders,” the statement said.
