Singh brothers and three others — former chairman and MD of Religare Sunil Godhwani, Kavi Arora and Anil Saxena — were arrested for allegedly misappropriating funds.
A Delhi court on Friday granted four day custody of former Ranbaxy Laboratories promoters Malvinder Singh and Shivinder Singh alongwith three others to police in the Rs 2,397-crore Religare Finvest (RFL) fraud case.
The Singh brothers, and three others —former chairman and managing director of Religare Enterprises (REL) Sunil Godhwani, Kavi Arora and Anil Saxena, who occupied important positions in REL and RFL — were arrested by the Economic Offences Wing (EOW) of Delhi Police for allegedly misappropriating funds of RFL to the tune of Rs 2,397 crore.
While Shivinder and other three were arrested on Thursday, Malvinder was detained on the intervening night of Thursday and Friday in Ludhiana and was formally arrested on Friday morning after he was brought here by the EOW team.
Chief metropolitan magistrate Deepak Sherawat granted custody of the five accused for four days to the Delhi police, who had otherwise sought for six days. The police told the court that the accused were involved in the alleged cheating, misappropriation and diversion of public money which needs to be tracked. It further said that the accused have to be confronted with other officials to ascertain the role of co-conspirators and the probe into the money trail was at an initial stage.
However, the accused opposed the Delhi police custody plea, saying there was no documentary evidence against them.
Malvinder’s counsel said that his client had joined the probe and answered all the questions to the best of his abilities and his custody was not required at all. “I joined the investigation twice in the past. I was in Ludhiana for my daughter’s treatment and was arrested yesterday (Thursday) late night,” Malvinder said.
However, his brother Shivinder, representing himself, told the judge that he was himself a victim and was ready to help and join the probe.
Meanwhile, the Delhi High Court reserved its order on the maintainability of Malvinder’s plea seeking quashing of the FIR against him for the alleged misappropriation of the RFL funds.
The elder brother told the HC that only the Serious Fraud Investigation Office (SFIO) could have investigated the allegations of fraud and cheating against him and the EOW had no jurisdiction to probe and arrest him.
Senior counsel AM Singhvi, appearing for Malvinder, contended that the SFIO had already initiated the probe in February last year on the directions of the corporate affairs ministry and, therefore, EOW “could not have jumped the gun”.
“The Companies Act clearly bars investigation under this law by any other agency other than the SFIO. If any such investigation has been initiated by any other agency, it shall be transferred to the SFIO,” the counsel argued.
However, the Delhi police told the court that “for a fraud like this involving multiple companies and thousands of crores, custodial interrogation is needed. The SFIO probe is concerned only with the Companies Act. We are probing for offences like cheating, criminal breach of trust, misappropriation, fraud and forgery and criminal conspiracy under IPC. Criminal conspiracy has to be unearthed and the Delhi Police’s probe is independent. The SFIO probe is separate”.
The EOW on March 27 had lodged an FIR against Singh and others on a criminal complaint by Religare Finvest, the lending arm of Enterprises (REL).
RFL in its complaint in December 2018 had termed it as a “well-thought out, organised criminal conspiracy and a financial scam of huge magnitude.”
“The quantum of these loans today stands at an astronomical amount of Rs 2,397 crore as principal amount and Rs 415 crore as interest. It is evident from the conduct of these entities that they never intended to pay these purported loans to RFL and defaulted on their obligation simultaneously with Shivinder and Malvinder’s exit from REL,” the complaint stated, adding that loans have been extended to as many as 19 entities which appear to be eventually controlled by the promoters of REL.
The arrest is the latest blow for the brothers who have been mired in a series of controversies for the past several years. Both the brothers were raided by the Enforcement Directorate in August this year.