However, the decision got delayed after changes in norms by Sebi wherein stock exchanges were authorised to take a call on declassification of promoters with shareholding up to 10 per cent.
By March 2018, stake of Singh brothers had come down to 3 per cent which further fell to 0.88 per cent in June 2020, as per data available on exchanges.
Even with 0.88 per cent, the exchanges are yet to declassify Singh brothers and their associate companies as promoters. Remaining 99.12 stake is with public and highest 6.83 per cent holding with Resilient India Growth Fund followed by World Bank arm International Finance Corporation at 4.97 per cent.
Having completed all the necessary work including approval from board and shareholders for the purpose, REL again approached stock exchanges BSE and NSE during the second half of the current financial year and a decision is pending with exchanges, sources said.
When contacted, REL chairperson Rashmi Saluja told , “We are following the due process for re-classification and post shareholders’ approval in July, we have applied for re-classification to exchanges. This reclassification will be a huge confidence booster for all our stakeholders.”
It is to be noted that REL’s NBFC arm Religare Finvest Ltd (RFL) is in the centre of the alleged misappropriation including the fixed deposits with Lakshmi Vilas Bank.
RFL has been in financial distress due to alleged misappropriation of funds by erstwhile promoters Singh brothers. Multiple investigative agencies including Enforcement Directorate and Economic Offences Wing of Delhi Police are probing the case of financial bungling and have initiated legal proceedings against them.
Post the financial irregularities amid massive leveraging, the RBI had initiated action and put the company under corrective action plan (CAP) of the Reserve Bank of India (RBI) since January 2018 due its weak financial health, which bars undertaking of any fresh business.
“We have been under CAP for all right reasons. Because company was under CAP, we preserved the book pretty all right,” she said adding that after restructuring, the company would seek for removal of CAP, Saluja had said earlier this month.
While committing to combat the wrongdoings of the earlier promoters’ (Shivinder and Malvinder) and others, who caused RFL a damage of about Rs 4,000 crore, legally and with all available options to recover the money, Saluja had said that the transparent working in tune with lenders and regulators had earned appreciation from the RBI and Sebi.
The alleged misappropriation of funds by erstwhile promoters through Corporate Linked Book of Rs 2,037 crore and Lakshmi Vilas Bank allegedly misappropriating RFL’s FD of Rs 791 crore led to severe Asset Liability Mismatch in the NBFC arm’s books and contributed towards RBI putting it under CAP in January 2018.
Having paid Rs 6,500 crore to lenders since change of management in 2018, Religare Finvest should complete debt restructuring by December to get out of Reserve Bank’s corrective action plan and start new business from next financial year, she had said.
In March alone, the company has repaid about Rs 875 crore to banks and the total outstanding debt stands at Rs 4,600 crore.