The arrest is the latest blow for the brothers who have been mired in a series of controversies for the past several years.
The Economic Offences Wing (EoW) of Delhi Police on Thursday arrested former promoter of Ranbaxy Laboratories and co-founder of Fortis Healthcare Shivinder Mohan Singh along with two others — Religare’s former CEO and managing director Sunil Godhwani, and NK Ghoshal, a long-time associate of the promoters — following a complaint by Religare Finvest, the lending arm of Religare Enterprises (REL).
The company has accused them of diverting funds to the tune of Rs 740 crore.
Shivinder’s elder brother Malvinder Mohan Singh is on the run and a lookout circular has been issued against him. According to sources, he is hospitalised somewhere in Ludhiana.
Religare Finvest (RFL) had filed a criminal complaint in December 2018 with the Economic Offences Wing of the Delhi Police against the promoters of REL, Malvinder and Shivinder as well as REL’s former CMD Sunil Godhwani, NK Ghoshal, the directors and officers of the promoter entities and other unknown persons for various offences, including cheating, criminal breach of trust, misappropriation, fraud and forgery and criminal conspiracy. Following the complaint, a case was filed against them in May this year.
Both the brothers were raided by the Enforcement Directorate in August this year.
The arrest is the latest blow for the brothers who have been mired in a series of controversies for the past several years. The brothers are part of one of the prominent business families of the Capital but have been in the news in recent years for all the wrong reasons.
In its complaint, RFL has alleged that it has been cheated and its properties worth hundreds of crores have been misappropriated, siphoned of and diverted through a labyrinth of financial transactions.
“A well-thought out, organised criminal conspiracy and a financial scam of huge magnitude has been effected by the accused, the promoters of REL and its directors and other officers of entities owned, controlled and associated with the promoters,” the complaint said.
According to the complaint, both Shivinder and Malvinder had lost complete control over REL and its subsidiaries, including RFL, pursuant to invocation of the shares pledge by them and other promoter entities with various banks in February 2018, thus leading to their exit and takeover by a new board.
The new board during internal inquiries found that the poor financial condition of the NBFC firm “was due to wilful defaults on significant unsecured loans, defined for internal purposes as a corporate loan book (CLB) by borrower entities, either related, controlled or associated with the promoters, all of who had been provided the subject loan from the complainant company at a non-arms length basis in violation of corporate governance norms and in contravention of policies and prudential behaviour expected of a NBFC registered with a RBI,” the FIR stated.
In 2008 the brothers made headlines when they sold the country’s largest drug manufacturing firm, Ranbaxy Laboratories for Rs 10,000 crore to Japanese major Daiichi Sankyo. Later, they were charged by the Japanese firm of cheating them and subsequently lost a Rs 3,500-crore arbitration case against them.
They had founded a hospital chain, Fortis Healthcare, but their failure to repay the lenders made them lose control. Here also, there are charges of siphoning of funds by the brothers.