It's been a while since the Indian financial press has reported on the financial fraud saga involving the Singh brothers, Malvinder and Shivinder, along with their cousin, Gurinder Singh Dhillon -- the guru of Radha Soami Satsang Beas, whose family reportedly ended up with close to a billion dollars worth of ill-gotten rupees.
But recently someone emailed me a link to a LiveMint story, "Fortis plans moving court to recover ₹403 cr from Singh brothers and promoters."
Download Fortis plans moving court to recover ₹403 cr from Singh brothers and promoters
Here's how the story starts out:
Fortis healthcare Ltd is likely to approach the Delhi High court seeking to recover ₹403 crore, which was allegedly siphoned off from Fortis by its former promoters, two people aware of the matter said.
The move follows an order dated 17 October by the Securities and Exchange Board of India (Sebi) that directed Fortis to take necessary action to recover ₹403 crore along with due interest from the former promoters, Malvinder and Shivinder Singh, and various promoter companies within 90 days. With the deadline being missed, Fortis is likely to approach the court in an ongoing case by Japanese drugmaker Daiichi Sankyo Inc.
Daiichi had moved the high court here seeking direction to the brothers to take steps towards paying its ₹3,500 crore arbitration award, including depositing the amount. It had also urged the court to attach their assets, which may be used to recover the award.
In its plea, Fortis is likely to urge the court that if any direction related to payment of the award is taken, Fortis funds and the Sebi order should be kept in mind. The case is likely to be taken up on May 10.
The amount Fortis is seeking, 403 crore rupees, is about $58 million.
That's how much SEBI, the Securities and Exchange Board of India, had determined was siphoned off into shell companies, some of which (maybe all) were controlled at the time by members of the Dhillon family and close associates. These excerpts from the story should worry Gurinder Singh Dhillon and his family.
Apart from the brothers Malvinder Singh and Shivinder Singh, the Sebi order named RHC holdings, Shivi Holdings Pvt. Ltd, Malav Holdings Pvt Ltd, Religare Finvest Ltd, Best Healthcare Pvt. Ltd, Fern healthcare Pvt. Ltd and Modland Wears Pvt. Ltd.
...In its 13 February petition, Fortis asked the regulator to invoke the law under which a person can be arrested and held in prison. Under the same provision, properties can be attached from defaulted entities, including bank accounts of their heirs, successors, legal representatives to the extent of the full loan accounts and interest thereupon.
Now, I'm not sure what "entities" refers to. Is it the shell companies alone, or is it also the people who were the recipients of the money that was fraudulently diverted to the shell companies?
This graphic from a February LiveMint story, "Fortis fraud may exceed ₹2,000 crore, says SFIO," illustrates the situation.
Note that three of the Fortis companies named in the SEBI order are shown as having funneled money into the pockets of the Dhillon family. So it will be interesting to see whether the companies have the $58 million being sought by Fortis, or whether that money needs to be recovered from the Dhillon family if Fortis is to be paid.
A Money Control story was brought to my attention, "Digging Deeper: the Singh brothers and the saga of Fortis." It doesn't have any new information, so far as I could tell, but rather is an overview of previous stories about this subject.
Download Digging Deeper: The Singh brothers and the saga of Fortis
Here's excerpts where the RSSB guru and his family are mentioned. If you get confused, don't worry. This is a highly complex financial fraud saga with many moving parts and numerous actors.
Quartz, in early 2019 carried a piece about one of the many feuds the two brothers were embroiled in where the elder of the duo, Malvinder Singh, reportedly filed a criminal complaint against brother Shivinder, with whom he once, yes, as we all know, ran the pharmaceutical giant Ranbaxy Laboratories.
The piece spoke among other things about the complaint registered with the economic offences wing of the Delhi Police where Malvinder claimed that Shivinder, Gurinder Singh Dhillon—the spiritual head of the Radha Soami Satsang—and others committed financial fraud and sent him death threats. He also sought Rs8,742 crore ($1.2 billion) as compensation.
The complaint also claimed that Shivinder had manipulated finances because he aspired to the status of a spiritual head within Dhillon’s organisation.
...The unexpected thread in this story is that nearly Rs 2,700 crore from the Ranbaxy proceeds have been allegedly routed to entities owned by Gurinder Singh Dhillon's family. Dhillon is the spiritual head of Radha Soami Satsang Beas and the money was routed allegedly to companies associated with senior Radha Soami Satsang Beas (RSSB) functionaries over three years. Of that, Rs 2,000 crore was invested in two firms, Prius Real Estate and Prius Commercial Projects.
Separately, says the piece, Rs 1,750 crore wad invested in Religare Enterprises (REL) and about Rs 2,230 crore in Fortis - again from the Ranbaxy proceeds - to fuel their growth. All these turn out to be fatal mistakes.
We quote, "The money transferred to Dhillon and associates - estimated to be between Rs 4,000-6,000 crore, with interest, depending on who you ask - remains unpaid to the Singhs. The rapid and reckless expansion spree that REL and Fortis embark on lands them in a debt trap when the slowdown hits in 2009. That's the beginning of a vicious cycle of mortgaging assets and equity in group companies to raise loans to pay off their previous liabilities."
...In February 2019, Malvinder, narrates the piece, filed a criminal complaint against Shivinder, the Dhillon family as well as the Godhwani kin - Sunil and Sanjay (who headed loss-making REL subsidiary Ligare Aviation). In the complaint filed before the Economic Offences Wing he seeks Rs 8,742 crore owed to him by the alleged accused.
...In his 2018 statement and the NCLT filing, Shivinder said he took “public retirement” in 2015 to serve in spiritual organisation Radha Soami Satsang Beas (RSSB) and that, until October 2017, he was “not involved in the strategic operations” of companies like Religare or RHC.
Yet, says Prabha, it is Shivinder’s involvement with RSSB that Malvinder alleges is the main cause of the depletion of the Singhs’ wealth.
Shabnam Dhillon, Gurinder Singh Dhillon’s (the 'Baba') wife, was a director in Prius Real Estate and Prius Commercial Projects until August 2016, shows the Ministry of Corporate Affairs (MCA).
“I say that these loans and advances have become due, however, due to the differences within the family, the recovery process for the same has been blocked… In order to further strengthen the recovery process, I have even initiated criminal proceedings against some of the borrowers who owe money to the judgment debtors before the Economic Offences Wing,” read Malvinder’s affidavit.
His EOW complaint alleges that Shivinder, along with Sunil Godhwani and Dhillon, conspired to “siphon” money from RHC and settle the Dhillon family’s debts and dues by absorbing them in RHC. This includes an alleged plan by the younger Singh to take over six companies, including Modland Wears, Best Healthcare and Fern Healthcare, “without initiating any financials and legal due diligence”. The EoW complaint further alleged that the six companies in question had extended loans exceeding Rs 1,000 crore to the Dhillon and Godhwani family.
Modland, Fern and Best — in which the MCA says Shivinder is a director — were involved in “fictitious and fraudulent” transactions of over Rs 400 crore withdrawn from Fortis through ICDs, according to the Sebi.
We quote, "Malvinder claimed his younger brother signed a “family settlement” with Dhillon agreeing to “absolve” him of “any wrongdoing whatsoever and agreeing that no liabilities or legal proceedings or criminality would be attributable” to the RSSB chief under any circumstances.
Furthermore, Daiichi in 2018 alleged that the brothers had siphoned funds through a complex “web of companies”, to render its award, now valued over Rs 3,500 crore, a “mere paper decree”. In October last, Daiichi rushed to the Delhi High Court asking it to attach properties of several companies currently not a party to its ongoing case against the Singhs. Its lawyers alleged in court that the siblings, via companies controlled by them, were routing funds to downstream companies that further used the funds to settle debts of land-owning companies. Over Rs 2,500 crore was diverted this way, they alleged.
...In a Live Mint piece, former minister Kapil Sibal said something interesting and we quote, "Their nearly ₹6,300 crore has been siphoned off by some 'baba'. These children have been duped.''
However as multiple news sources have implied, there was nothing innocent about any of the players.
...As Forbes' Megha Bahree reported, the ongoing sibling slugfest between Malvinder and Shivinder Singh has returned yet again with a new round of allegations.
We quote, "Malvinder Singh, former chairman and managing director of Fortis Healthcare, has filed a criminal complaint against Shivinder, among others, alleging they had made death threats and committed fraud. Apart from his younger brother, Malvinder has leveled his accusations at Gurinder Singh Dhillion, a spiritual guru they follow, and a few of his family members as well as the former chairman of Religare Enterprises, Sunil Godhwani.
In the complaint, Dhillon stands accused of threatening to kill Malvinder if he failed to agree to his demands, as per the news report. It was not clear exactly what those demands were. This is the first time that Malvinder has publicly accused the family's spiritual guru of impropriety. The rift between the brothers became public when Shivinder formally disassociated himself from his brother who he blamed, along with Godhwani, for problems at the group."
Hard to remember, isn't it that the brothers once helmed a fortune once valued in excess of $2 billion and could have built the kind of legacy that the founders had envisaged when they first founded a small but ambitious company.