In Religare case, court frames charges of conspiracy, cheating against Singh brothers for causing Rs 2,400-crore loss to firm

“From the evidence available on record, the SEBI report, and the statements of the witnesses cited by the prosecution, it is clear that the accused Malvinder Mohan Singh and Shivinder Mohan Singh in criminal conspiracy with each other and having dishonest intention, gained wrongfully by transferring the funds to RHC Holdings (a company) through 19 entities (being the accused companies herein) by misusing their influence and caused wrongful loss to the complainant (RFL) company…,” said Additional Sessions Judge Sheetal Chaudhary Pradhan of Saket court in her order on Thursday.

The judge said the accused are liable to be charged for offences punishable under sections 420/120B of the Indian Penal Code (IPC).

“Also, during the aforesaid period, accused no. 1 and 2 (the brothers) having influence and control over the complainant company (RFL) diverted the amount of Rs 1,260 crore through 19 entities which were under their control and management directly or indirectly,” the judge noted.

As per the EoW, the Singh brothers had put RFL in a poor financial condition by distributing loans to the companies controlled by them but having no financial standing.

These companies wilfully defaulted on repayments, causing, alleged the EoW.

“In view of the aforesaid allegations, it is made out that both accused no. 1 and 2 (the Singh brothers) in conspiracy with each other created the corporate loan book since the beginning of RFL business primarily for utilizing funds at their disposal,” the judge said.

Securities and Exchange Board of India (SEBI) had received complaints in January and February 2018, alleging financial mismanagement and diversion of funds in RFL. Subsequently, an investigation was initiated to examine the alleged diversion of funds through RFL and the prosecution relied upon the Forensic Audit report by SEBI.

There are other allegations against the brothers as well. In 2018, Japanese drugmaker Daiichi Sankyo alleged that the brothers had siphoned off funds from them through a complex “web of companies”. In another case, siphoning of funds to the tune of around Rs 472 crore was alleged from Fortis Healthcare, a company that the Singh brothers used to own. In 2019, Fortis had written to SEBI seeking the initiation of legal proceedings against the brothers, and their arrest, to recover the dues.