RHC Holding seeks about Rs 2,500 crore from Religare in damageshttps://indianexpress.com/article/business/companies/rhc-holding-seeks-about-rs-2500-crore-from-religare-in-damages-5331712/

RHC Holding seeks about Rs 2,500 crore from Religare in damages

According to a tripartite agreement signed by RHC, REL and RCML on February 13: “RHC entities infused preference share capital to the tune of Rs 1,333.47 crore in RCML in various trances between 2011-12 and 2015-16.”

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The first notice has been sent to Religare Enterprises Limited (REL) and Religare Capital Markets Limited (RCML), a subsidiary of REL.

RHC Holding — an investment firm controlled by former Religare promoters Malvinder Mohan Singh and Shivinder Mohan Singh — has sent legal notices to Religare seeking around Rs 2,500 crore in damages.

The first notice has been sent to Religare Enterprises Limited (REL) and Religare Capital Markets Limited (RCML), a subsidiary of REL. The notice asks the two companies to “repay/refund the amount of preference share capital outstanding as on date i.e. Rs 524.47 crore along with the premium of Rs 538.41 crore thereon till March 31, 2018, totalling Rs 1,062.88 crore”.

According to a tripartite agreement signed by RHC, REL and RCML on February 13: “RHC entities infused preference share capital to the tune of Rs 1,333.47 crore in RCML in various trances between 2011-12 and 2015-16.”

The first notice states that RHC was “shocked to discover” that RCML has suffered huge losses worth Rs 731.84 crore on account of “provisioning/ write-off of amount equal to the value of investments made by RCML in Religare Capital Markets International (Mauritius) Limited.”

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Moreover, the notice states that RHC has “reliably learnt” that the investment made by its entities “have been diverted for other purposes by RCML, thereby constituting a material breach of the arrangement.”

According to the 2016-17 annual report of REL, RCML would be merged with it. RHC as well as REL did not respond to the queries sent by The Indian Express. The second notice sent to REL is in relation to investments made by RHC in Finserve Shared Services Limited, formerly known as

RCSL. It states that RHC agreed to incorporate RCSL as its 100 per cent subsidiary to provide Religare and its subsidiaries “shared services and corporate setup.” It adds that the incorporation of RCSL was subject to an “express assurance” of a buyout by the REL — of the investments made by RHC — by the end of 2016-17. On June 19, 2015, the REL terminated this agreement.

The second legal notice, therefore, has asked REL to pay RHC a sum of Rs 1,430.85 crore. In July 2016, Sunil Godhwani stepped down as chairman and managing director of Religare Enterprises and was designated as whole-time director and CEO. On September 6, 2017, Godhwani stepped down as whole-time director as well. On August 24, Singh brothers issued a joint statement that stated: “The (RHC) Group’s troubles today stem from the Group’s association with Mr. Sunil Godhwani who had started his association in Religare as its CEO in 2001… After the Ranbaxy sale closed, it was decided that Mr. Godhwani would lead our family office in addition to his role in Religare, and from end 2008, he had full Management control of RHC Holding and its subsidiaries.”