A day after the Delhi Police arrested former Religare Enterprises Ltd promoter Shivinder Singh, three others for alleged diversion of public money “in a clandestine manner for their own benefit”, his brother and company’s former co-promoter Malvinder Mohan Singh was also arrested on Friday.
A Delhi Court has granted 4 days of custodial interrogation of Malvinder, Shivinder Singh and three others arrested in the case.
Malvinder, who is also named in a complaint lodged by Religare Finvest Ltd (RFL), was detained by the Economic Offences Wing of the Delhi Police last night. The other three who were arrested are former REL Chairman and Managing Director Sunil Godhwani and Kavi Arora and Anil Saxena who, police said, had held “important managerial positions in REL and RFL”.
Additional Commissioner of Police (EOW) O P Mishra said: “In the complaint, allegations have been levelled by Manpreet Singh Suri of Religare Finvest Ltd against Malvinder Mohan Singh, Shivinder Mohan Singh, Sunil Godhwani and others. The alleged persons, having absolute control on Religare Enterprises Ltd and its subsidiaries, put RFL in poor financial condition by way of disbursing loans to companies having no financial standing and controlled by the alleged persons.”
“These companies wilfully defaulted on repayments and caused wrongful loss to RFL to the tune of Rs 2397 crore,” Mishra said, adding that independent audits had also flagged these. “The alleged persons systematically siphoned and diverted money of general public in a clandestine manner for their own benefit,” he said.
The arrest comes two months 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. In July, The Indian Express had reported that funds were allegedly diverted from REL, a company listed in India, to a Jersey firm that was solely owned by Malvinder Singh and Shivinder Singh, using a web of offshore companies.
REL, which earned consolidated profits of Rs 92 crore on revenues of Rs 748 crore in 2007-08 turned into a loss-making firm in subsequent years with losses mounting to Rs 1,350 crore on revenues of Rs 2,586 crore in 2017-18.
The Singh brothers had a fallout with Sunil Godhwani, who was appointed by the brothers to lead their family office after the Ranbaxy sale in addition to his role in Religare (of which he had become the CEO in 2001). Godhwani quit as Chairman and Managing Director of REL in July 2016, and stepped down as whole-time director in September 2017. Later on, the two brothers fought, blaming each other and Godhwani for fraud. Malvinder alleged that loans were given to Gurinder Singh Dhillon, the spiritual guru of Radha Soami Satsang Beas, to buy real estate.
Documents obtained from Bermuda law firm Appleby and Mauritius-based Conyers, Dill and Pearman — two big and reputed incorporators of offshore companies — show that Religare Capital Markets Ltd (RCML), a wholly-owned subsidiary of REL, set up an investment holding subsidiary in Mauritius in 2008.
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