Edelweiss abandons acquisition of Religare’s securities business

Edelweiss Financial Services Ltd said it abandoned the deal to acquire the securities business of Religare Enterprises, including the company’s securities and commodities broking and depository participant services.

“Due to the seller’s inability to obtain the requisite clearances within the agreed timeline, the binding agreement has come to an end on March 15, 2018,” Edelweiss said.

The deal was announced in December last year.

Under it, Edelweiss was supposed to get around 1,250 points of presence, including over 90 branches, over 1 million clients and the employees of Religare.

The move was supposed to boost Edelweiss’ wealth management business. “We were looking at either acquiring large number of clients or increasing our distribution reach through opening branches and hiring employees. The idea was to achieve scale,” the company had said at the time.

The latest development comes in the context of reports about the government starting investigations into alleged fraud committed by the former promoters of Religare, the Singh brothers.

The brothers have since announced that they are stepping down from the board of the financial services company. Religare is also expected to reconstitute its board due to the drastic decline seen in the shareholding of the former promoters after their pledged shares were confiscated by their lenders.

Promoters, including Malvinder Singh and Shivinder Singh, saw their combined shareholding in financial services provider Religare Enterprises Ltd come down by 2.16 percentage points due to the invocation of pledges, they said in a regulatory filing.