ED issues summons to Care Health counsel over Rashmi Saluja Esops 'advice'
The Enforcement Directorate has summoned senior counsel Arvind Datar regarding his advice to Care Health Insurance on ESOPs issued to Rashmi Saluja. The investigation revolves around whether the ESOP issuance violated regulations, leading to scrutiny of legal opinions provided. Former Irdai chairman Hari Narayan may also be questioned in connection with the matter.
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Mumbai: India's federal anti-money laundering agency, the Enforcement Directorate, has issued summons to senior counsel Arvind Datar over his legal advice to Care Health Insurance on the controversial Esops (employee stock ownership) issued to former Religare Enterprises chairperson Rashmi Saluja. Religare holds a 62.98% stake in Care.Sources said the agency may also question former Irdai (Insurance Regulatory and Development Authority) chairman Hari Narayan, who also provided a legal opinion on the ESOP issue.Saluja was forced to step down from Religare Enterprises-Care Health's parent-in February, after shareholders blocked her board re-appointment, ending an 18-month tumultuous legal battle against the Burman family-the biggest shareholders of Religare. Thereafter, the Burman family that runs Dabur officially took control of Religare as its new promoter.Datar, who has represented Sebi in high-profile cases like the Sahara fundraising case, is said to have told ED officials that lawyers cannot be summoned for investigations involving their clients. According to sources, he also told them that lawyers are also prohibited from disclosing legal advice given to their clients because of professional privilege.Queries sent to Datar and Care in connection to this remained unanswered until press time.In 2019, Care appointed Saluja as its non-executive chairperson. Two years later, it sought approval from Irdai to grant her Esops. In May 2022, Irdai rejected the plan on the grounds that Saluja's role as non-executive chairperson was similar to that of a non-executive director and that her remuneration should match such a role.Care then sought opinions from Datar and Narayan. Both of them advised the company that it could issue Esops because Saluja was an employee of Religare and held the position of executive chairperson. Giving her Esops as a non-executive chair of Care was not allowed.Based on this, Care allotted her 22,700,000 Esops. A securities lawyer explained that Esops can be given to both executive and non-executive directors if they are employees and not promoters. He added that Sebi rules consider non-executive directors as employees for the purpose of Esops.In 2024, Irdai directed Care to buy back 7,569,000 shares given to Saluja at the same price paid for them (that is ₹45.32 per share) for violating its rules. The regulator also ordered the cancellation of all unused Esops.Saluja made headlines for opposing the Burmans attempting to gain control of the financial services company.
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