The news of Ranbaxy promoter Shivinder Singh by the economic offences wing (EOW) of Delhi police will send a strong sigthe nal to business community that they can no londer escape the long arms of law. According to reports, Shivinder Singh and Sunil Godhwani, former CMD of Religare, were taken in custody by the economic offence wing of Delhi police on the charges of money laundering and fraud to the tune of Rs 740 crore. While Shivinder is stated to be in the custody of Delhi Police, another team is looking for his elder brother Malvinder Singh. Lastthe week, economic offences wing of Mumbai Police has arrested housing finance company HDIL’s promoters – Rakesh Wadhawan and his son Sarang Wadhawan.
The arrest of high profile business tycoons by Mumbai and Delhi police has sent a strong signal to the industry leaders that the cases of financial irregularities will no longer be tolerated.
“I think the government is serious about these frauds and wants to send a message to the industry that these things will no longer be tolerated,” said Anil Joshi of Unicorn India Venture.
However, he cautions that some of these cases could be due to genuine business reasons.
“We need to see whether a loan default is due to genuine business reasons or it’s a case of fraud,” Anil Joshi told Financial Express Online.
Shivinder joins the long list of business leaders facing legal action
The case of Ranbaxy promoters, Singh brothers and HDIL promoters, father-son duo, is not an isolated one. There is a long list of business leaders that have been facing court cases and investigation by law enforcement agencies due to the alleged financial frauds and irregularities committed by them in the course of their business.
Naresh Goyal of Jet Airways
Naresh Goyal, the founder and promoter of now defunct airline Jet Airways, and his wife have been barred from leaving the country in a case of corporate loan default.
Anil Sharma & Amrapali Group
In July this year, Supreme Court cancelled the licence of NCR based real estate developer Amrapali Group. Amrapali group promoter Anil Sharma, two other direcotrs Shiv Priya and Ajay Kumar were already in police custody. Once Amrapali Group was one of the fastest growing real estate developer in the NCR region and its promoter Anil Sharma was a regular face in TV debates and industry events.
Subrat Roy and Sahara Group
Supreme Court had also put Sahara Group chairman Subrat Roy and two other top executives – Ravi Shankar Dubey and Ashok Roy Choudhary in Tihar jail in March 2014 for not complying with its directions in a case filed by the stock market regulator – Stock Exchange Board of India (SEBI). Subrat Roy spent more than two years in jail before he was released by the top court in May 2016.
SK Jain, CMD of Syndicate Bank & promoters of Prakash Industries
In 2014, a CBI team had arrested SK Jain, then CMD of public sector Syndicate Bank in a bribe for loan scam case. The anti-corruption agency also arrested Prakash Industries CMD Ved Prakash Agarwal and director Vipul Agarwal and a chartered accountant Pawan Bansal and some of his associates for facilitating the deal.
SK Jain was accused of accepting bribe for enhancing the credit limit of big companies in violation of the laid down procedure.
This was the first case when the CBI had arrested a CMD level official of a public sector bank.
Bhushan Steel’s case
In 2018-19, the Serious Fraud Office (SFIO) under the ministry of corporate affairs had arrested Neeraj Singhal, former MD of Bhushan Steel and Nitin Johri, the chief financial officer of the company in a case of corporate fraud.