Religare Enterprises Ltd (REL) on Monday notified the exchanges that its Board has commissioned a governance review of REL and its subsidiaries — Religare Finvest and Religare Housing Development Finance.
Additionally, the Board has decided to approach the new promoters, the Burman Group, for immediate funding support to sustain operations of the company.
REL’s board has engaged law firm Trilegal and Grant Thornton Bharat LLP to conduct the governance of the company and its subsidiaries.
“The objective is to review past operating practices, suggest improvements around systems and controls for future implementation and to identify any potential instances of misconduct by certain current and/or ex-employees of the aforementioned companies,” REL said in the exchange notification.
Further, REL said its Board has reviewed the fund flow position of the company and observed a cash flow gap over the next few months.
“After examining various options, the Board has unanimously decided to approach the new promoters, the Burman Group, for immediate funding support to sustain operations of the company,” the company said.
Additionally, to address the funding requirements, the Board has recommended a short-term inter-corporate loan from the promoter group or its associate entities in the interim.
This, it said, will be best suited given the tight timeline for the fund requirement.
The Burman family, founders and controlling stakeholders of consumer goods conglomerate Dabur India gained control of financial services provider Religare in February after a 17-month takeover battle.
Under former executive chairperson Rashmi Saluja, Religare had attempted to block the Burmans from increasing their stake in the company.
However, Saluja was removed from the Board in February after her reappointment was unsuccessful.
Fresh Measures
- Governance review to be done by Trilegal and Grant Thornton Bharat
- Facing a cash flow gap, REL’s board seeks immediate funding from new promoters
- REL proposes a short-term inter-corporate loan from the promoter group or its associate entities to urgently bridge the funding gap
- Review to also identify any potential instances of misconduct by certain current and/or ex-employees of the companies
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