SEBI Orders Former Religare Chair Rashmi Saluja To Disgorge ₹1.99 Crore In Insider Trading Case

The Securities and Exchange Board of India (SEBI) on Wednesday directed former Religare Enterprises Limited (REL) executive chairperson Rashmi Saluja to disgorge ₹1.99 crore for insider trading in REL shares linked to the Burman Group's open offer.

It has also imposed a ₹40 lakh monetary penalty on her.

SEBI Whole Time Member Kamlesh C Varshney passed the order, holding that Saluja sold REL shares while in possession of unpublished price-sensitive information (UPSI) relating to the Burman Group's impending open offer announced on September 25, 2023.

The case arose after the Burman Group wrote to REL's board alleging suspicious trades by Saluja before the public announcement of its open offer to acquire a 26% stake in REL at ₹235 per share. SEBI then investigated whether Saluja had traded while in possession of UPSI concerning the impending offer.

According to the regulator, Saluja had meetings and communications with Dr A.C. Burman and Arjun Lamba of the Burman Group before the announcement. SEBI relied on WhatsApp records, witness statements, and cross-examination material to conclude that she was aware of the impending open offer before it became public.

SEBI found that Saluja sold REL shares on September 21 and 22, 2023. It held that these trades helped her avoid losses of approximately ₹1.99 crore.

Saluja denied the allegations. She argued that no WhatsApp communication showed she was informed about the impending open offer. She also contended that mere frequent communication could not establish access to UPSI without cogent evidence.

Rejecting her defence, the regulator observed: “The above sequence of events establishes that the Noticee was in possession of the UPSI with respect to the impending open offer by the Burman Group in the scrip of REL and the act of sale of shares of REL by the Noticee on September 21 & 22, 2023 was based on the aforesaid UPSI and carried out with the intention to avoid losses.”

SEBI, however, held that Saluja could not be treated as a “connected person” merely because of her role at REL, since the UPSI regarding the open offer originated from the Burman Group and not REL. However, it held that actual access to UPSI was sufficient to attract insider trading rules.

On Saluja's argument that the open offer price could not have been estimated in advance, SEBI ruled, “ It is true that the exact open offer price on the date of public announcement, i.e., September 25, 2023 may not be known to the Noticee. But if on September 21, 2023 one knows that open offer is going to be made shortly, it can calculate the expected offer price on that day and that price would not be materially different from calculation based on actual day of PA."

Explaining the basis for the disgorgement amount, the regulator held that Saluja had avoided losses of ₹1.99 crore by selling REL shares before the information became public and therefore held her liable to return the same.