SEBI v. Rashmi Saluja (Religare): insider trading disgorgement of ₹1.99 crore and the open-offer UPSI window

The facts in brief

The Burman Group — promoter group of Dabur India and other listed entities, acting through a consortium led by Burman Capital — had been building a position in Religare Enterprises Ltd. (REL) from late 2022. REL is the holding company of Religare Broking, Religare Finvest, and Care Health Insurance, with a non-promoter shareholding structure that made it a takeover target.

On 25 September 2023, the Burman Group made a public announcement under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011 of an open offer to acquire 26% of REL at ₹235 per share. REL's share price moved sharply on the announcement.

Dr. Rashmi Saluja was, at all material times, the Executive Chairperson and a Key Managerial Personnel of REL. The SEBI investigation — opened on complaints from REL minority shareholders and converted into a formal probe by mid-2024 — found that Saluja had been privy to the unfolding open-offer intent of the Burman Group from at least 8 September 2023, through internal management discussions, WhatsApp exchanges, and direct communications with Burman Group representatives.

On 21 and 22 September 2023 — three days before the public announcement — Saluja sold approximately 12.93 lakh shares of REL. SEBI computed her loss-avoided gain at ₹1.99 crore by comparing the 21-22 September 2023 sale prices against the post-disclosure trading range.

A Show-Cause Notice was issued under Sections 11 and 11B of the SEBI Act read with the SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules 1995. Personal hearings were conducted in late 2025 and early 2026. On 13 May 2026, SEBI Whole-Time Member Kamlesh C. Varshney passed a final order finding Saluja guilty of insider trading in violation of Sections 12A(d) and 12A(e) of the SEBI Act 1992 read with Regulations 3 and 4 of the SEBI (Prohibition of Insider Trading) Regulations 2015.

The UPSI dating question

The most consequential doctrinal question was how to date the UPSI window for an open-offer transaction. Saluja's defence position was that UPSI did not crystallise until the formal public announcement of 25 September 2023 — and therefore the 21-22 September trades pre-dated the UPSI window and fell outside Regulation 4.

The WTM rejected this construction. The UPSI window was held to run from 8 September 2023 to 25 September 2023 — anchored at the first internal-management communication of credible open-offer intent and closing at the public announcement.

Three propositions follow.

First, UPSI under Regulation 2(1)(n) is "unpublished" price-sensitive information — the operative concepts are unpublished (not yet in the public domain) and price-sensitive (capable of materially affecting the share price when published). Once a credible internal communication of the Burman Group's open-offer intent reached REL's senior management, the information was unpublished and price-sensitive. Formal Board approval or public announcement is not a precondition to UPSI status.

Second, "credible" does not require fully crystallised or unconditional commitment. The Bench's analysis tracks the SEBI Informal Guidance Scheme line — a transaction at "agreed-in-principle" or "near-final" stage with material confidence of completion may carry UPSI weight even if final documentation is pending. The Burman Group's open-offer intent, by 8 September 2023, had reached that stage on the evidentiary record (sworn statements of Dr. A.C. Burman and Mr. Arjun Lamba on communication of open-offer intent, corroborated by WhatsApp and CDR records).

Third, the corollary is that a KMP receiving such communication enters the UPSI possession-zone on the date of receipt, and a trading-window restriction follows from that moment until the information becomes generally available.

The pre-clearance defence

Saluja's second line of defence was that she had obtained pre-clearance approvals from REL's compliance officer for the trades — and that the pre-clearance regime under the PIT Code of Conduct insulated her from liability.

The WTM rejected the construction:

Pre-clearance from the Compliance Officer does not absolve the insider from the prohibition under Regulation 4 of the PIT Regulations 2015 where Unpublished Price Sensitive Information was in fact in the insider's possession at the time of the trade.

The reasoning is structurally important. Pre-clearance under the PIT Code of Conduct is an internal-compliance device — the compliance officer reviews whether the proposed trade falls within a trading-window, satisfies the minimum-holding-period requirement, and is otherwise consistent with the company's Code of Conduct. Pre-clearance does not — and cannot — adjudicate whether the requesting insider is in possession of UPSI; the compliance officer typically does not have access to the senior-management deliberations from which UPSI arises.

The WTM's reading restores the architecture of Regulation 4 to its statutory shape: the prohibition is on the insider, and the insider's possession of UPSI is the operative test. A pre-clearance certificate is evidentially relevant to the insider's good-faith claim but is not a defence to the statutory prohibition.

The reading also has prophylactic value. If pre-clearance were treated as an insulating defence, senior insiders could route trades through a compliance-officer-clearance mechanism while withholding from the compliance officer the UPSI they actually possess — a structure that would gut the PIT regime. The Bihani-style derivative-liability logic from the Lyka Labs family of NCLAT cases finds an analogue here: substantive prohibitions cannot be circumvented by procedural form.

The ESOP-funding rationalisation

A third defence was that the 21-22 September 2023 share sale was structured to fund Saluja's ESOP exercise in Care Health Insurance — a subsidiary in which she held an unexercised stock-option position. The WTM characterised this as post hoc rationalisation rather than a contemporaneous business motivation, finding no contemporaneous documentary record (board approval, exercise notice, escrow arrangement) tying the September 2023 REL sales to a specific Care Health ESOP exercise within a defined timeframe.

The WTM's approach reflects the Supreme Court's N. Narayanan v. SEBI (2013) 12 SCC 152 line that insider-trading allegations are tested on a preponderance of probabilities, with the burden shifting to the insider to demonstrate a genuine alternative explanation supported by contemporaneous record.

The allegations stand proven based on a preponderance of probabilities, as established by the evidence on record.

The evidentiary record — WhatsApp messages recovered from devices, call data records, sworn statements from Dr. A.C. Burman and Arjun Lamba on the communication of open-offer intent, and contemporaneous meeting records — was held sufficient on the balance to establish UPSI possession and trading-during-window.

The disgorgement and penalty architecture

SEBI's quantification combined three sanctions.

Disgorgement of ₹1,99,00,000 — computed on the "loss avoided" methodology by comparing the 21-22 September 2023 sale price against the post-disclosure trading range. The 12% per annum interest accrual from the date of the violation until payment provides a meaningful financial incentive for prompt deposit and disincentivises the use of the appellate process as a deferral mechanism.

Monetary penalty of ₹40 lakh under Section 15G of the SEBI Act — the dedicated insider-trading penalty provision. The figure sits well within the statutory bracket and is calibrated to the seriousness of the violation (KMP-level insider, structured trades in proximity to a publicly announced transaction).

Market-access restraint of two years from the date of the order, barring Saluja from accessing the securities market and from associating with any listed company as a KMP for the prescribed period. This is the structural sanction with the longest reach — it removes the offender from positions of fiduciary access for a period during which compliance and governance culture in the relevant listed entities can re-establish themselves.

The disgorgement is to be deposited in the Investor Protection and Education Fund within 45 days. The IPEF deposit structure preserves the public-interest character of disgorgement: it is not a transfer of the gain to a complainant but a recovery to the regulator-administered fund for investor protection purposes, consistent with the Reliance Industries v. SEBI (2022) line on disgorgement architecture.

The Burman Group's deposition and the cross-examination record

The order records that Saluja's defence had cross-examined Dr. A.C. Burman and Mr. Arjun Lamba on the communication of open-offer intent. The WTM noted:

Dr. Saluja, during cross-examination, was not able to find any defect in the deposition of Dr. A.C. Burman and Arjun Lamba about their claim of communication of an open offer.

The procedural record is doctrinally important. SEBI's quasi-judicial process under the SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules 1995 includes a right of cross-examination of material witnesses, and a deposition that survives meaningful cross-examination acquires substantive evidentiary weight. Saluja's inability to displace the Burman/Lamba testimony — supplemented by WhatsApp and CDR corroboration — closed the principal evidentiary contest.

After the order

A Securities Appellate Tribunal appeal under Section 15T of the SEBI Act is anticipated within 45 days. The appeal will likely contest both the UPSI dating (Saluja's position that UPSI did not crystallise until 25 September 2023) and the loss-avoided disgorgement methodology. The 12% interest accumulation will pressure prompt deposit even pending appeal — under the typical SAT practice, disgorgement deposits are required notwithstanding appellate pendency unless a specific stay is granted.

The order coincides with SEBI's broader enforcement push under Chairperson Tuhin Kanta Pandey — including the reformulated SEBI Stock Brokers Regulations 2026 — and signals continued aggressive enforcement of the PIT framework against senior corporate insiders. The "layered sanctions" template (disgorgement + Section 15G penalty + market-access restraint) is now the consistent SEBI approach in KMP-level insider-trading cases.

Religare itself is expected to face follow-on shareholder-derivative actions and corporate-governance scrutiny. The Burman Group's open-offer architecture, having been publicly affirmed by SEBI's recital of the September 2023 events, gains legal-historical cementing. The SEBI order header refers to "certain entities" plural — suggesting that parallel investigations of other REL insiders who may have traded in the UPSI window may produce further orders in the months ahead.

Compliance implications for KMPs and senior corporate insiders

Three operational takeaways flow from the order.

First, KMPs receiving internal communication of a credible takeover, open-offer or M&A intent enter the UPSI possession-zone from the date of that communication. Trading-window protections under the company's PIT Code of Conduct must be respected from that point — and pre-clearance approvals do not provide substantive insulation.

Second, post hoc rationalisations of trades executed during a UPSI window will receive close evidentiary scrutiny. The contemporaneous record — board minutes, exercise notices, escrow agreements, written instructions to brokers — must be in place before the trade. Reconstructing a business justification after the fact is unlikely to satisfy the SEBI evidentiary standard.

Third, the loss-avoided disgorgement methodology — particularly with 12% interest from the date of the violation — produces sharp financial exposure even for trades that might appear small relative to overall portfolio value. Senior corporate insiders should treat UPSI-window restrictions as absolute and structure significant share-disposal needs around clearly-mapped non-UPSI windows.

Related on Valkya

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• Keshav Bihani v. CCI: NCLAT upholds the Railways polyacetal-tubes cartel penalty
• SEBI Stock Brokers Regulations 2026: the reformulated stock-broker compliance architecture
• Securities and corporate-governance roundup, May–June 2026

Sources

1. SEBI — Final order in the matter of suspected insider trading by certain entities in the scrip of Religare Enterprises Ltd. (13 May 2026): https://www.sebi.gov.in/enforcement/orders/may-2026/101405.html
2. BusinessToday — "SEBI finds Rashmi Saluja guilty of insider trading in Religare shares, orders Rs 1.99 cr disgorgement" (13 May 2026): https://www.businesstoday.in/latest/corporate/story/sebi-finds-rashmi-saluja-guilty-of-insider-trading-in-religare-shares-orders-rs-1-99-cr-disgorgement-531368-2026-05-13
3. BWLegalWorld — "SEBI Orders Rs 1.99 Crore Disgorgement From Former Religare Chair Rashmi Saluja In Insider Trading Case": https://www.bwlegalworld.com/article/sebi-orders-rs-1-99-crore-disgorgement-from-former-religare-chair-rashmi-saluja-in-insider-trading-case-606714
4. Business Standard — "SEBI orders Rashmi Saluja to disgorge Rs 2 crore in insider trading case": https://www.business-standard.com/markets/news/sebi-orders-rashmi-saluja-to-disgorge-rs-2-crore-in-insider-trading-case-126051301513_1.html
5. Cyril Amarchand Blogs — Securities Law 2026 enforcement digest: https://corporate.cyrilamarchandblogs.com/category/securities-laws/