The Former Religare promoter Mr. Shivinder Mohan Singh and his brother, co-promoter Mr. Malvinder Singh have been arrested. The Singh brothers are held by police due to default in the repayment of the previous dues and causing a total loss of Rs 2,397 crore to Religare Finvest Ltd firm. The Singh Brothers have been in controversy because of the sale of the pharma firm Ranbaxy to a Japanese drug-maker Daiichi Sankyo.
The economic offenses wing (EOW) of the Delhi Police on Thursday, 10th October 2019 has arrested the former Religare promoter Shivinder Mohan Singh and the company's ex-CMD Sunil Godhwani for inability to repay the dues and causing a loss of Rs 2,397 crore to Religare Finvest Ltd (RFL).
On Thursday night, Religare's co-promoter Malvinder, Shivinder's elder brother was also accused in the case, and he had been detained from Ludhiana in Punjab.
Two former top executives of the company, Mr. Kavi Arora and Mr. Anil Saxena, were also arrested for their involvement in the case. This action against the promoters is marked as a fall for one of the best-known business families in Delhi and India itself.
Malvinder and Shivinder Singh's grandfather Bhai Mohan Singh had founded Ranbaxy, which has been India's largest pharma company. The Singh family had also founded the Fortis, a chain of hospitals across various cities in India.
The Singh brothers have been expelled from Religare and Fortis after they had pledged their shares to raise money, but still were not able to repay the loans, setting the stage for a rapid fall of the top business family of the country.
The brothers have been continuously in the controversy since the sale of Ranbaxy to a Japanese drug-maker Daiichi Sankyo in a deal of Rs 17,000 crore that had been signed in the year 2008. Later, the Japanese firm Daiichi Sankyo had filed an arbitration case in Singapore stating that the Singh brothers had been hiding the real facts and did not share the crucial information about the state of the company before the sale. The US FDA (Food and Drug Administration) had found serious irregularities in Ranbaxy's plants.
The Singh brothers who were heirs to the Ranbaxy Laboratories Ltd had owed about $500 million to Daiichi Sankyo after a Singaporean court found them guilty of misguiding the Japanese drug-maker to purchase Ranbaxy by not sharing the important information.
Additional Commissioner of Delhi Police (EOW) O P Mishra said in a statement that a case of cheating and fraud was registered last March on the basis of a complaint registered by RFL legal manager Manpreet Singh Suri and the role of the accused Singh Brothers and other persons in diverting the money of the public was established during the investigation and they were arrested on the basis of the evidence that was collected," as per O P Mishra.
The Singh brothers and the top executives, including Godhwani, are being probed by other agencies, namely the Enforcement Directorate and the Serious Frauds Investigation Office (SFIO).
In the complaint, Manpreet Singh Suri had alleged that the accused had full control of the functioning of the Religare Enterprises and the subsidiaries, including RFL, during the tenure. "The brothers left the company when it was in a poor financial condition by disbursing the loans to companies with no financial standing that were controlled by them."
These companies with no financial standing are accused of knowingly defaulting on the repayment of the dues and loss to RFL worth Rs 2,397 crore. The fraud was also pointed out during the audit that was carried out by the Reserve Bank of India and the market regulator Sebi (Securities and Exchange Board of India).
The Delhi Police said in a statement that Shivinder Singh was the promoter of Religare Enterprise, which had 85% of share in RFL and Mr Godhwani was the chairman and managing director, while the other two people who have been accused held senior managerial positions. The relationship between the two Singh brothers had been strained after the allegations of fund diversion from the healthcare chain. The relationship between Godhwani and the brothers were also soured.
In August 2019, the Enforcement Directorate (ED) had involved in searches of the homes of the former Ranbaxy chief executive officer (CEO) Malvinder Singh and his brother Shivinder Singh in Delhi because of their connection with a money laundering case.
In February 2019, Malvinder Singh filed a criminal complaint against his own brother Shivinder Singh alleging that he had involved in the diversion of Rs 740 crores from RFL without informing him about this diversion. The economic offenses wing had detained Godhwani from the airport in May 2019 for the purpose of questioning him in this case while he was on his way to London.
In the previous year, the two fraud brothers had not been successful over a business deal, which led to more strain between the two brothers.
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