Malvinder Singh and Shivinder Singh, erstwhile promoters of Religare, have been accused of siphoning Rs 1544.53 crore from Religare Enterprises Limited (REL). This financial crime was committed by making loans to as many as 18 companies, which were diverted ultimately for the benefit of the Singh brothers.
The story of this crime started unravelling when the Securities and Exchange Board of India (SEBI) received complaints in January and February of 2018 against the company, alleging financial mismanagement and diversion of funds primarily in Religare Finvest Ltd, a subsidiary of REL, for the benefit of the promoters, the Singh Brothers.
Following the complaint, an investigation was initiated. A forensic audit revealed that the interest of the shareholders of REL was affected as funds to the tune of
Rs. 2315.19 crore had been moved out from the listed company for the ultimate benefit of the Singhs, documents available with this writer reveal.
The funds of REL, to the extent of Rs 2473.66 crore, were moved out through certain borrower entities and, in turn, through various layers of connected conduit entities controlled by the promoters of REL and RFL during the relevant investigation period. The ultimate beneficiary of the above diversion of funds from the consolidated financials of REL were RHC Holdings Pvt Ltd, ANR Securities Pvt Ltd and Religare Corporate Services Ltd, and consequently, Malvinder Mohan Singh and Shivinder Mohan Singh, who jointly owned and controlled RHC Holdings through Malav Holdings Ltd. and Shivi Holdings Ltd. It was observed that funds were also moved out of RFL through loans to borrower entities for the ultimate benefit of promoter entities and for rollover of loans through layers of various entities.
The Singh brothers were arrested by the Economic Offences Wing (EOW) of Delhi Police in 2019 over these allegations of siphoning off funds.