India's Religare asked to seek regulatory nod for top investor raising stake

BENGALURU (Reuters) -India's markets regulator has asked Religare Enterprises to apply for approvals to let the billionaire Burman family buy more shares in the financial services company, dealing a blow to the company's attempt to block the move.

The Burmans, who founded and control consumer goods conglomerate Dabur India, raised their stake in Religare to nearly 25% in September last year, triggering the so-called open offer requirement that allows them to buy more shares from public shareholders.

However, Religare had sought to block the deal saying the open offer was "riddled with irregularities and statutory violations and cast serious doubts on the fit and proper status of the acquirers".

The Burmans -- who want to buy around 26% more of Religare to bolster their presence in the rapidly growing financial services sector -- approached the Securities and Exchange Board of India (SEBI) due to the company's lack of cooperation.

The SEBI, in an interim order dated June 19, asked Religare to furnish an undertaking that it will apply by July 12 to regulatory authorities, including the central bank, for approvals for the open offer.

It also asked Religare to form a committee of independent directors, if not already done, but did not give a reason for the directive.

"As per SEBI's advisory the company will apply for the fit and proper status of the acquirers for the open offer to the concerned regulators including the RBI (Reserve Bank of India)," a spokesperson for Religare said in a statement.

"We remain committed to completing the open offer in the interest of public shareholders of Religare Enterprises," a spokesperson for the Burman family said in a statement.

Shares of Religare, which have fallen about 13% since Burmans announcing open offer last September, closed 3.9% higher on Thursday.

(Reporting by Sethuraman NR and Hritam Mukherjee in Bengaluru; Editing by Savio D'Souza and Mrigank Dhaniwala)