Singh brothers, 3 others arrested for massive Rs 2400 crore fund misappropriation in Religare
NEW DELHI: The Delhi police have sought almost a week's custody of the erstwhile promoters of Religare Finvest, Malvinder Mohan Singh and Shivinder Mohan Singh and 3 others, who were arrested by the Economic Offences Wing(EOW) of the Delhi Police for alleged fund misappropriation at Religare Finvest Ltd (RFL) to the tune of Rs 2400 crore, that caused a massive unlawful loss to RFL.
Besides Singh brothers, former Religare CMD Sunil Godhwani and two others-Kavi Arora and Anil Saxen, who occupied important managerial position in Religare Enterprises and Religare Finvest during the same time were also held and produced in the Saket court on October 11.
All the accused were produced before Chief Metropolitan Magistrate Deepak Sherawat. As per a PTI report, cops told the court that their custodial interrogation was necessary as they were allegedly involved in the diversion of public money and needs to be tracked. However, opposing the Delhi police plea, counsel representing the accused, contended that their custody was not required as the evidence is documentary.
Shivinder Singh was arrest from Delhi on October 10 while the older Malvinder Singh was arrested from Ludhiana later after the issuance of a lookout notice.
The arrest came following a fund diversion complaint lodged by Manpreet Singh Suri of Religare Finvest against the Malvinder, Shivinder, Godhwani and others alleging that they systematically siphoned off and diverted general public's money in a clandestine manner for their benefit.
The complainant added that despite the red flags raised by the RBI, the Singh brothers deliberately did not take corrective action and continued with the “financial scam”.
As per Additional CP (EOW) O P Mishra, the role of the accused persons in diverting public money was established during the investigation and they were arrested on the basis of the evidence collected by the police. The arrest came after the Enforcement Directorate (ED) carried out searches at the homes of the brothers after revelations from the Mauritius Leaks on their offshore holdings were described as “corroborative evidence” for the investigating agency.
Shivinder Singh was the promoter of Religare Enterprise, which had 85% in RFL and had absolute control of REL and its subsidiaries. Post their exit on February 14, 2018, the REL and RFL boards were re-constituted.
REL had earlier stated that the new board, during an independent forensic audit, discovered that one of the major reasons for RFL's terrible financial condition was the misappropriation by LVB of monies due to RFL on account of four fixed deposits worth Rs 791 crore (including interest incurred on the principal amount of Rs 750 crore).
Singh brothers and others have allegedly pushed RFL into dire financial straits by disbursing loans to companies having no financial standing that were controlled by them.
As per a statement by the police, these companies willfully defaulted in repayment and caused wrongful loss to Religare Finvest to the tune of Rs 2,397 crore, which was also pointed out and flagged during independent audits by the Reserve Bank of India and the Securities and Exchange Board of India.
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In December 2018, Religare Finvest had filed a complaint against the Singh Brothers. In May, both were charged with cheating, fraud and misappropriation of funds.
In August, the Enforcement Directorate (ED) searched their residences on charges of money laundering. The raids took place after a case was filed against the Singh brothers under the Prevention of Money Laundering Act (PMLA).
Also, in April, the Supreme Court threatened to jail the two former promoters of Ranbaxy, for not complying with an order to pay dues to Japanese firm Daiichi Sankyo.
Singh brother had been dogged by controversy since the sale of Ranbaxy to Japanese drug-maker Daiichi Sankyo in a deal worth Rs 17,000 crore wherein the duo was accused of suppressing critical information while selling their pharma firm Ranbaxy Laboratories to Daiichi.