The economic offences wing of the Delhi Police arrested former Religare promoter Shivinder Mohan Singh and the company’s ex-CMD Sunil Godhwani for alleged default in repayment of dues and causing wrongful loss of £239.7 million to Religare Finvest Ltd (RFL). The brothers have been ousted from Religare and Fortis after they pledged their shares to raise money, but could not repay the loans, setting the stage for a rapid slide for the scions of the top business family. The brothers and top executives, including Godhwani, are also being probed by other agencies, including the Enforcement Directorate and the Serious Frauds Investigation Office (SFIO).
Two former top executives of the company, Kavi Arora and Anil Saxena, were also arrested for their alleged involvement in the case. Additional CP (EOW) O P Mishra said a case of cheating and fraud was registered last March on the basis of a complaint registered by RFL legal manager Manpreet Singh Suri. “The role of the accused persons in diverting public money was established during the investigation and they were arrested on the basis of the evidence we had collected,” Mishra alleged.
In the complaint, Suri had alleged that the accused had absolute control over the functioning of the Religare Enterprises and its subsidiaries, including RFL, during their tenure. “The accused had left the company in a poor financial condition by way of disbursing loans to companies having no financial standing that were controlled by them,” according to the complaint. These companies are accused of wilfully defaulting in repayments and wrongful loss to RFL worth Rs 2,397 crore.
The police action against the brothers marks a stunning fall for one of the best known business families in Delhi and the country. Malvinder and Shivinder’s grandfather late Bhai Mohan Singh had set up Ranbaxy, which was the country’s largest pharma company, and the family also founded Fortis, which runs a chain of hospitals across India.
The two brothers have been dogged by controversy since the sale of Ranbaxy to Japanese drug-maker Daiichi Sankyo in deal worth £1.7 billion that was signed in 2008. Later, the Japanese firm filed an arbitration case in Singapore alleging that the Singh brothers had concealed facts and withheld crucial information about the health of the company before the sale. The US FDA had serious irregularities in Ranbaxy’s plants.