Private equity firm Kedaara Capital said on Monday it will continue to support the current management at CARE Health Insurance, and asserted that it stands by the decisions made by the company’s Board.

This stance of Kedaara is significant as it comes on the heels of a controversy around the Employee Stock Option Plans (ESOPs) issued to Religare Enterprises Ltd (REL) Executive Chairman Rashmi Saluja. 

This CARE ESOPs issuance to Saluja has become a thorny issue in the ongoing tussle between the Burman family and the Saluja-led senior management at REL. 

REL Board led by Saluja has mounted a stiff resistance to the open offer announced by the Burman family that is looking to take control of REL. 

Saluja is currently a non executive Chairman at CARE Health Insurance, an entity in which REL owns about 63 per cent stake. 

Kedaara Capital owns 16 percent stake in CARE Health Insurance and this stake was acquired in June 2020.  This private equity firm currently has no shareholding in REL.

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Commenting on the Kedaara Capital’s stance on the recent ESOP controversy, its Founder and Managing Partner Sunish Sharma said in a statement “Kedaara is a proud shareholder of Care Health Insurance. Led by a best-in-class management and guided by a strong board, the company has always had the highest standards of governance, compliance and operational excellence.

We look forward to continuing to support it as it goes from strength to strength”.

Proxy advisory firm InGovern had in a recent report alleged that the CARE ESOPs were issued to Saluja despite IRDAI’s rejection and without REL shareholder approval.

Moreover, it said that REL’s annual report lacks disclosure regarding CARE ESOPs being included in Saluja’s compensation.

The InGovern report valued the stock options issued to Rashmi Saluja, Executive Chair of REL and non-executive chairperson of CARE Health, over last 3-4 years at over ₹480 crore. This included grant of stock  options of CARE, valued at over ₹250 crore.

However, Religare’s Board of Directors had recently asserted that the ESOPs of CARE Health Insurance — a subsidiary of Religare Enterprises — granted to Rashmi Saluja was above board and in full conformity with the insurance regulator IRDAI’s guidelines.

The CARE Health Insurance ESOPs were granted to Rashmi Saluja only in her capacity as an employee/ executive director and Chairperson of Religare Enterprises Ltd (REL), the Board of Directors of REL had said in a recent statement.

These CARE ESOPs — 2,27, 11,327 options to purchase shares of CARE— were not to be granted in her capacity as Non-executive Chairperson of Care Health Insurance, it added.

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The REL Board had recently said that CARE Health has an ESOP pool of 12.5 per cent of equity for its employees, another 2.5% pool is meant for employees of the Religare Group in consideration of their contribution to the growth of CARE Health.

From the 2.5% pool, Rashmi Saluja — as an employee of REL— was granted 2.27 crore options with exercise price per option at ₹ 45.32 per share in June 2022, the REL Board had recently said.

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