Religare Enterprises orders governance review, seeks short-term loan from Burman Group

Financial services firm Religare Enterprises Ltd (REL) on Monday (March 17) said it has initiated a governance review of its operations and those of its subsidiaries, Religare Finvest Ltd (RFL) and Religare Housing Development Finance Corporation Ltd (RHDFCL).

"This is to inform that the Board of Religare Enterprises Limited (the Company/REL) has commissioned a governance review of REL and its subsidiaries, namely, Religare Finvest Limited (RFL) and Religare Housing Development Finance Corporation Limited (RHDFCL)," Religare Enterprises said in a regulatory filing.

The review aims to assess past operating practices, enhance systems and controls, and investigate potential misconduct by current or former employees. To conduct the review, REL’s Board of Directors has engaged law firm Trilegal, which will be assisted by Grant Thornton Bharat LLP.

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"The objective is to review the past operating practices, suggest improvements around systems & controls for future implementation and to identify any potential instances of misconduct by certain current and/or ex-employees of the aforementioned companies. For conducting this review, the Board of Directors have resolved to engage a law firm M/s Trilegal who would be assisted by M/s Grant Thornton Bharat LLP," it said.

Additionally, the board has identified a cash flow gap over the next few months and has decided to seek immediate funding support from its new promoters, the Burman Group. The board has recommended securing a short-term Inter-Corporate Loan (ICL) from the promoter group or its associate entities to sustain operations, citing the urgency of the requirement.

"Further, the Board has reviewed the fund flow position of the Company and observed a cash flow gap over the next few months. After examining the various options, the Board has unanimously decided to approach the new Promoters, the Burman Group, for immediate funding support to sustain the operations of the Company," Religare Enterprises added.

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Shares of Religare Enterprises Ltd ended at ₹234.55, down by ₹7.15, or 2.96%, on the BSE.