“Lawyers Cannot Be Summoned For Client Matters”
The Enforcement Directorate (ED) has cancelled its summons to Senior Advocate Arvind Datar regarding legal advice on ESOPs granted to Rashmi Saluja. The withdrawal comes amid ongoing scrutiny over alleged violations in the Rs 250 crore stock option case.
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NEW DELHI: The Enforcement Directorate (ED) took back the summons it had earlier sent to Senior Advocate Arvind Datar. This was related to the investigation into the Employee Stock Option Plan (ESOP) given by Care Health Insurance to Rashmi Saluja, the former chairperson of Religare Enterprises.
As per news sources, Arvind Datar, who is a very senior and well-known lawyer and has even represented SEBI in big cases like the Sahara fundraising matter, told the ED that:
“Lawyers cannot be summoned for investigations involving their clients.”
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He also explained that:
“Under legal rules, lawyers are prohibited from disclosing legal advice given to their clients.”
The ED had earlier summoned Datar because he gave a legal opinion that supported the ESOP granted to Rashmi Saluja. This ESOP grant has been under review by regulators and investigative bodies. But now, ED has officially told Datar that he does not need to appear anymore. This means the ED has withdrawn the summons.
The ESOPs in question were more than 2.27 crore stock options, worth over Rs 250 crore. These were granted to Rashmi Saluja by Care Health, a company fully owned by Religare Enterprises.
In November 2023, the Insurance Regulatory and Development Authority of India (IRDAI) said that the ESOP grant broke industry rules. According to those rules, companies cannot give more than Rs 10 lakh in compensation to non-executive directors without prior approval.
IRDAI ordered Care Health to cancel all unexercised options and also buy back the shares that were already given.
After IRDAI passed its order, the ED started a money laundering investigation based on a complaint made by the Mumbai Police Economic Offences Wing. As part of its probe, ED searched offices in August 2024 and also froze the ESOP shares that were given to Rashmi Saluja and other top executives of Care Health.
The summons to Arvind Datar was part of a bigger investigation. ED was looking into the legal and structural details behind how the ESOPs were given. Now that the summons is withdrawn, it is not clear if the ED will still keep looking into the role of legal advisors involved in this matter.
In a separate legal battle, Rashmi Saluja has also gone to the Delhi High Court. She is trying to stop the Burman family’s takeover of Religare Enterprises. Saluja claims that the takeover breaks rules under SEBI’s takeover code, and she has asked the court to stop them from using voting rights on shares they got through an open offer.
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