Started in the year 1884, Dabur is one of India’s oldest business groups that are still running strong despite nearly 140 years in existence. The FMCG giant, which houses some of India’s popular brands such as Dabur Chyawanprash, Hajmola, Odomos and Vatika hair oil, is controlled by The Burman family, which has recently found itself on the wrong side of the law in the middle of a conflict with the board of a financial services company which the f. Read More
Vanya Gautam Updated: Nov 16, 2023, 13:14 IST
Started in the year 1884, Dabur is one of India’s oldest business groups that is still running strong despite nearly 140 years of existence. The FMCG giant, which houses some of India’s popular brands such as Dabur Chyawanprash, Hajmola, Odomos and Vatika hair oil, is controlled by the Burman family, which has recently found itself on the wrong side of the law in the middle of a conflict with the board of a financial services company which the family wants to take over.
What Trouble Is Dabur Facing?
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Recently, an FIR by Mumbai police into the Mahadev betting app has named Dabur chairman Mohit Burman and director Gaurav Burman. However, both have denied any links to the illegal betting case.
Why Has An FIR Been Filed Against Dabur?
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In August this year, the Burman family had through various entities accumulated a 21.5% stake in Religare Enterprises Ltd. (REL). Then in September, it bought another 5.27% stake, triggering a mandatory open offer to buy an extra 26% stake from the public. The same month, the family announced plans to raise its stake in REL by investing $255 million in an open offer for a 26% stake, thus intending to take control of the company.
But nearly a month later, the independent directors of REL wrote to regulators such as RBI, SEBI and the insurance watchdog, levelling allegations of fraud and other breaches against the Burmans. The independent directors sought to make the issue a broad-based one, highlighting REL’s ownership of companies operating in regulated businesses and arguing that the party seeking to acquire the business ought to be scrutinised for the “fit and proper” criteria that apply to licence holders in these segments, as per ET.
REL was founded and controlled till 2018 by the Singh brothers of Ranbaxy and Fortis – Malvinder and Shivinder – who had to serve jail time for fraud involving siphoning off funds from their companies. Then a board comprising independent directors was put in place to steer the company to safety and recover siphoned-off funds.
Now, the independent directors have alleged that the Burmans are in material breach of regulatory obligations that may harm the firm.
The allegations in the letter, a copy of which has been reviewed by ET, include charges of collusion with the erstwhile owners, the Singh brothers; a pending case of fraud against Dabur India chairman Mohit Burman ; questions about the source of funds to be used for the acquisition; and market manipulation, among others. According to the letter, the Burman Group is involved in various “frauds and financial improprieties,” which are being investigated by various statutory authorities.
How Has Dabur’s Burman Family Responded?
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The Burman family has claimed that the allegations by the REL directors are a response to the Burmans drawing attention to some trades by an unspecified executive. “At this stage, we are concerned that some of these statements are being orchestrated as falsehoods by interested persons at REL. Some of these allegations are being made because we drew the attention of the company by our letter dated October 26, 2023, to the board of REL, to certain share trades by a certain senior executive at REL immediately prior to the launch of our open offer,” according to the Burman family statement. “We are concerned that instead of dealing with the legitimate queries raised in our letter of October 26, 2023, the attention of regulatory authorities/board/public shareholders is being deflected to such falsehoods.”
Days later, Dabur chairman Mohit Burman and director Gaurav Burman were named in an FIR in the Mahadev app betting case. The Burman family said the FIR was an “arm-twisting” attempt that comes at a time when the Burman family is in the process of acquiring Religare Enterprises.
What’s The Status Of Mahadev Betting Scam Probe
The Enforcement Directorate is probing the Mahadev Book betting app and its promoters for money laundering. The central agency has pegged the size of the scam at Rs 5,000 crore, as per the report. Earlier this month, in a press statement, the agency said it was probing whether the Chhattisgarh Chief Minister Bhupesh Baghel received Rs 508 crore from the absconding promoters of illegal betting app.
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