The Supreme Court on Friday directed the Securities and Exchange Board of India (SEBI) to decide on Florida-based businessman Danny Gaekwad’s request to submit a competing bid of ₹275 per share for a controlling stake in Religare Enterprises Ltd (REL).
A Division Bench comprising Chief Justice of India Sanjiv Khanna and Justice Sanjay Kumar also ruled that the Burman family’s open offer for REL, originally set to close on February 7, will remain open until February 12. Additionally, the court instructed Gaekwad, who is contesting the Burman Family’s open offer, to deposit ₹600 crore in earnest money by the extended deadline (Feb 12).
The apex court has also ruled that if Gaekwad deposits the required amount by the deadline, the Burman open offer will remain open until SEBI decides on Gaekwad’s application for a counter offer.
However, if Gaekwad does not deposit the said amount, this interim order will stand vacated.
Welcome directive
Reacting to the Supreme Court’s directives, Danny Gaekwad told businessline that he will comply with apex court’s direction and would deposit the ₹600 crore by February 12.
“I welcome the Supreme Court’s directions to SEBI. I am very much in the game for the long haul. We will 100 per cent deposit the ₹600 crore by February 12 in an escrow account” he said.
It is wrong on part of certain people to think that I am not a serious bidder. I had to approach SC as they (Indian regulators) did not leave me with any choice, Gaekwad added.
A setback
The SC Bench directives—seen as a setback for Burman family—comes amid an ongoing legal tussle over the acquisition, with SEBI’s decision on Gaekwad’s request likely to influence the course of the takeover battle. The SC directives ensure that both regulatory and financial conditions are met as the case progresses, corporate observers said.
In the event SEBI decides on allowing backward exemption of the application, the open offer will continue 3 days after such decision, according to SC directions.
SEBI has now been ordered to determine two aspects—the correct date for the detailed public statement of the Burman open offer (whether its October 3, 2023, or January 18, 2025) and evaluate Gaekwad’s exemption application under SEBI’s Takeover Code.
The latest SC interim ruling on the Religare issue comes on two Special Leave Petitions (SLPs): one filed by minority shareholder Sapna Rao, and another by Danny Gaekwad.
Both petitions argued that Gaekwad’s competing open offer—priced at ₹275 per share—should be allowed to run concurrently with the Burman family’s open offer, which is set at ₹ 235 per share.
Rao maintains that allowing a higher counteroffer will ensure better price discovery and protect public shareholders from a potentially undervalued deal.
Senior Advocates Aryama Sundaram and Mukul Rohatgi, appearing on behalf of Sapna Rao and Danny Gaekwad respectively, argued that the actual date of public announcement as per SEBI Regulations is January 18, 2025, and therefore the competing bid by Danny Gaekwad is within the regulatory timelines.
Senior Counsel Abhishek Manu Singhvi representing the interests of the Burman family, argued that Gaekwad’s application is a deliberate attempt to delay the open offer, disrupting the orderly process that public shareholders have relied on. According to him, multiple attempts have been made by the petitioners to stall the open offer.
Solicitor General Tushar Mehta appearing on behalf of SEBI stressed that the regulatory framework governing open offers does not accommodate a competing bid once 15 working days have lapsed from the detailed public statement under Regulation 20(1) of the SEBI Takeover Code. Both counsels argued that the belated submission of Gaekwad’s bid should not interfere with the existing process.