ED summons Senior Advocate over legal advice in Care Health ESOP matter

The Enforcement Directorate (ED) has issued summons to Senior Advocate Arvind Datar in connection with its investigation into the Employee Stock Option Plan (ESOP) granted by Care Health Insurance to former Religare Enterprises chairperson Rashmi Saluja..Care Health Insurance is a wholly owned subsidiary of Religare Enterprises Limited. Formerly known as Religare Health Insurance, the company was rebranded in 2020 following a change in management..The summons pertains to a legal opinion rendered by Datar supporting the grant of stock options to Saluja, which is now the subject of parallel scrutiny by both the ED and the Insurance Regulatory and Development Authority of India (IRDAI). The agency is examining whether the issuance of over 22.7 million ESOPs - valued at more than ₹250 crore - was in contravention of regulatory norms or part of a larger scheme involving financial impropriety..In November 2023, IRDAI directed Care Health to cancel the unexercised ESOPs and repurchase 7.57 million shares already issued to Saluja. The regulator held that the grant violated insurance sector guidelines, which prohibit non-executive directors from receiving remuneration exceeding ₹10 lakh without prior approval.Following the regulatory order, the ED initiated a money laundering investigation based on a complaint filed by the Mumbai Police Economic Offences Wing. The agency conducted search operations in August 2024 and subsequently froze the ESOP shares allotted to Saluja and certain other senior officials of Care Health..The summons to Datar forms part of the ED’s wider probe into the circumstances and legal basis of the ESOP grant, and comes amid an ongoing corporate governance dispute between the Burman family - major shareholders of Religare Enterprises - and the erstwhile Saluja-led management..Separately, Saluja filed a suit before the Delhi High Court challenging a proposed resolution at the upcoming 40th Annual General Meeting (AGM), which seeks to appoint a new director in her place. She contended that the resolution is illegal, violates the Companies Act 2013 and contravenes a Reserve Bank of India (RBI) directive issued on December 9, 2024, which prohibits changes in REL's management.It was argued that the proposed resolution for her reappointment is unnecessary and unlawful, as her current term extends until February 25, 2028. However, the Court refused to stay the AGM, leading to Saluja being ousted.