ED Summons Senior Advocate Arvind Datar in ₹250 Crore ESOP Probe Involving Care Health Insurance and Former Religare Management
Kiran Raj
The Enforcement Directorate (ED) has issued summons to Senior Advocate Arvind Datar as part of its ongoing investigation into a contentious Employee Stock Option Plan (ESOP) granted by Care Health Insurance to former Religare Enterprises Limited (REL) chairperson Dr. Rashmi Saluja. This move represents a further development in the probe, which has already led to regulatory measures and the freezing of assets.
Care Health Insurance, formerly known as Religare Health Insurance before its 2020 rebranding, is a wholly-owned subsidiary of REL. The inquiry focuses on the issuance of more than 22.7 million ESOPs, reportedly valued at ₹250 crore, to Saluja. The ED suspects the issuance may have breached regulatory guidelines and could be part of a broader pattern of financial irregularities.
Sources indicate that the summons to Datar concerns a legal opinion he provided, which supported the legality of the ESOP allocation to Saluja. Both the ED and the Insurance Regulatory and Development Authority of India (IRDAI) are reviewing whether the grant complied with industry-specific regulations, particularly those concerning compensation limits for non-executive directors.
In November 2023, IRDAI instructed Care Health Insurance to cancel the unexercised ESOPs and repurchase 7.57 million shares already issued to Saluja. The regulator determined that the ESOP grant had violated norms restricting non-executive directors from receiving more than ₹10 lakh in compensation without prior approval.
Following IRDAI’s directive, the ED initiated a money laundering investigation based on a complaint filed by the Economic Offences Wing of the Mumbai Police. In August 2024, the agency carried out searches and subsequently froze the ESOP shares allotted to Saluja and multiple executives at Care Health.
The summons issued to Datar is part of the ED’s effort to closely assess the legal basis for the ESOP issuance, especially in light of the alleged regulatory breaches highlighted by IRDAI.
This matter coincides with a corporate dispute involving the Burman family, significant shareholders in REL, and the former management led by Saluja. In December 2024, Saluja filed a petition in the Delhi High Court to prevent a resolution at REL’s 40th Annual General Meeting that proposed her removal as director.
Saluja argued that the proposed resolution contravened the Companies Act, 2013, and a directive from the Reserve Bank of India (RBI) issued on December 9, 2024, which restricted any changes to REL’s management. She maintained that her current term as director continues until February 25, 2028, rendering the resolution “unlawful and unnecessary.” The High Court, however, declined to stay the AGM, and shareholders subsequently voted for her removal.
