The Enforcement Directorate (ED) has withdrawn its summons issued to senior advocate Arvind Datar in connection with an ongoing investigation into Employee Stock Option Plans (ESOPs) granted to Dr. Rashmi Saluja, former chairperson of Religare Enterprises Limited (REL), by Care Health Insurance.
Datar had been summoned for providing a legal opinion in support of the controversial ESOP allocation, which has come under regulatory and criminal scrutiny. However, the ED has now informed the senior lawyer that his appearance is no longer required. According to reports, Datar had objected to the summons, invoking professional privilege and asserting that legal professionals cannot be compelled to testify about advice rendered to clients.
The case revolves around the grant of 22.7 million ESOPs, valued at approximately ₹250 crore, to Saluja during her tenure as a non-executive chairperson. The issuance raised red flags with both the ED and the Insurance Regulatory and Development Authority of India (IRDAI), prompting investigations into possible violations of sectoral remuneration norms and broader financial impropriety.
In November 2023, IRDAI directed Care Health Insurance—formerly known as Religare Health Insurance—to cancel any unexercised ESOPs and repurchase the 7.57 million shares already issued to Saluja. The regulator found that the company had breached guidelines restricting compensation to non-executive directors without prior approval, particularly the ₹10 lakh cap.
Following this directive, a money laundering investigation was initiated by the ED in response to a complaint from the Mumbai Police’s Economic Offences Wing. By August 2024, the probe had resulted in the freezing of ESOP-linked shares held by Saluja and other company executives.
While Datar’s legal opinion had been cited in defense of the ESOP allocation, his exemption from further inquiry underscores the complex intersection of legal ethics, regulatory compliance, and corporate governance in the case.
The investigation remains active, with authorities examining potential financial irregularities in the broader framework of executive compensation and disclosure standards in the insurance sector.
