The drama surrounding the financial fraud saga involving the Singh brothers, Sunil Godhwani, and a guru, Gurinder Singh Dhillon, has taken another turn with the arrest of Malvinder Singh (his brother, Shivinder, and Godhwani were arrested previously).
A LiveMint story describes the arrest.
New Delhi: In late night drama on Thursday, the economic offences wing (EOW) of the Delhi police arrested former co-promoter of Religare Enterprises, Malvinder Mohan Singh, in Ludhiana (Punjab) for allegedly causing wrongful loss worth ₹2,397 crore to Religare Finvest Ltd, a senior Delhi police official said.
“He was nabbed in Punjab, and we are getting him to Delhi," a senior Delhi police official said about Malvinder Singh
An official statement from the Delhi Police will be available on Friday morning.
Malvinder Singh’s arrest comes hours after his younger brother Shivinder Singh, former Religare Enterprises chairman and managing director Sunil Godhwani, as well as two other officials from the companies were also arrested in the same case.
“The alleged persons, having absolute control of Religare Enterprises Ltd and its subsidiaries, put Religare Finvest Ltd in poor financial condition by way of disbursing loans to the companies having no financial standing and controlled by the alleged persons," the Delhi Police had said in the statement earlier on Thursday.
The accused, the Delhi police said, were arrested under section 409 (criminal breach of trust by a public servant, banker, merchant or agent) and section 420 (cheating) of the Indian Penal Code.
The financial irregularities were flagged during independent audits by the Reserve Bank of India and Securities and Exchange Board of India (SEBI), the Delhi Police said.
The arrests were made based on a complaint filed by Religare Enterprises arm Religare Finvest in December, when they alleged that the three had misappropriated funds of Religare Finvest to the tune of around ₹740 crore through loans to entities that were related to them or their associates.
Religare Finvest had also named N.K. Ghoshal, a long-time associate of promoters, along with directors of the promoter companies.
What strikes me about this sordid mess is what it reveals about the Singh brothers connection with their cousin, Gurinder Singh Dhillon, the guru of Radha Soami Satsang Beas.
Following the death of Malvinder and Shivinder's father, Dhillon is reported to have become a father figure to them, acting of both a trusted financial advisor and spiritual guide. Shivinder even had hopes of becoming the next RSSB guru and became a sevadar (volunteer) for the organization.
Well, that didn't work out very well for them.
Stories in the Indian financial press show that Dhillon and his family were the prime beneficiaries of the money that was fraudulently taken from companies controlled by the Singh brothers.
So the big question now is whether Indian authorities will continue their investigation into how the financial manipulations were orchestrated and who benefitted from the illegally gotten funds.
The RSSB guru and his family have been ordered to repay within 30 days up to $842 million that doesn't belong to them.
It's hard to believe, almost impossible, in fact, that Gurinder Singh Dhillon, his wife, and sons simply looked at hundreds of millions of dollars flowing into their bank accounts and didn't ask, "Gosh, how is this happening?" Almost certainly, they were willing participants in the financial fraud.
After all, Dhillon is supposed to be God in Human Form, a Perfect Living Master, who I've heard is fond of saying "my way or the highway." Yet in this case defenders of the guru are claiming that he was a passive recipient of vast amounts of money and had nothing to do with how it was obtained.
Yeah, right. I don't believe this. I suspect that Indian authorities don't believe it either.
UPDATE: The RSSB guru is claiming that he and his family don't owe any money to Religare. Well, as noted above, good luck with that argument. It'll be interesting to see if the High Court of Delhi buys it. The attorneys for RHC Holding, Singh brothers, and Daichi likely are already busy doing their best to refute that contention.
Probably Gurinder Singh Dhlllon had to take this step because he isn't able to repay what he and his family owe.
But the downside is that it puts a spotlight on the ultimate beneficiaries of the fraudulently-obtained money, and that could end up turning out badly for the Dhillons. Of course, it's impossible to predict how this Bollywood'ish drama will play out. Here's the Economic Times story.
NEW DELHI: Radha Soami Satsang Beas (RSSB) head Gurinder Singh Dhillon and his family members Friday approached the Delhi High Court saying they do not owe any money to RHC Holdings Pvt Ltd, promoted by Malvinder and Shivinder Singh.
The Dhillons filed the application following the court's direction to deposit the amount due to RHC Holdings Pvt Ltd in connection with the execution of Rs 3,500-crore arbitral award won by Japanese pharma major Daiichi Sankyo against former promoters of Ranbaxy LaboratoriesNSE 5.63 %Malvinder and Shivinder Singh.
Dhillons told the court that RHC Holding has made false claims that they owe money to the company.
Justice J R Midha sought response of RHC Holding, Singh brothers and Daiichi on the plea of Dhillons.
The court, in its September order, said the amount which 55 garnishees, including Dhillon family, owe to RHC Holdings should be deposited with the Registrar General of the Delhi High Court within 30 days. A garnishee order is an order against a third party for the recovery of debt or dues.
ANOTHER UPDATE: Looks like there could be even worse news for the Dhillon family, or at least for so-far unindicted co-conspirators. I've boldfaced some pertinent passages in this The Tribune story.
Former Fortis promoters Malvinder, Shivinder sent to police custody
New Delhi, October 11
A Delhi court on Friday granted the police four-day custody of former Fortis Healthcare promoters Malvinder Singh, his brother Shivinder and three others, arrested for allegedly misappropriating funds of Religare Finvest Ltd (RFL), causing it losses of Rs 2,397 crore.
Chief Metropolitan Magistrate Deepak Sherawat allowed custodial interrogation of the five people who were arrested by the Economic Offences Wing (EOW) of Delhi Police.
Malvinder (46) was arrested on Friday morning, while Shivinder (44), Sunil Godhwani (58), the former chairman and managing director of Religare Enterprises Ltd (REL), Kavi Arora (48) and Anil Saxena, who occupied important positions in REL and RFL, were arrested on Thursday by the EOW for allegedly diverting the money and investing in other companies.
The police sought the custodial interrogation of the accused saying it was necessary as they were allegedly involved in diversion of public money which needs to be tracked.
It further said that a lot of people are involved in the alleged cheating and misappropriation of the fund.
The police sought their custodial interrogation saying the accused have to be confronted with other officials to ascertain the role of co-conspirators and said that the money trail was to be found in the case which was at an initial stage of probe.
The counsel representing the accused opposed the Delhi police plea and said their custody was not required as the evidence is documentary.
The counsel for Malvinder said in the court that he has joined the probe and answered all the questions for which his custody was not required.
Malvinder told the court that he has given an affidavit before the high court saying the money was not with him.
Malvinder opposed the police plea claiming that he was being made a soft target, however, his brother Shivinder, representing himself, did not oppose the plea.
Shivinder told the court that he was himself a victim and was ready to help and cooperate in the investigation.
RFL is a subsidiary of the REL. Malvinder and Shivinder were earlier the promoters of REL.
The police had said that a look out circular (LOC) had been issued against Malvinder as he was absconding.
He 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, Additional Commissioner of Police (EOW) O P Mishra earlier told reporters.
The EOW had registered an FIR in March after it received a complaint from Manpreet Singh Suri of the RFL against Shivinder, Godhwani and others alleging that loans were taken by them while managing the firm but the money was invested in other companies.
According to the police, the complainant stated that the four had absolute control on REL and its subsidiaries.
“They put RFL in poor financial condition by disbursing loans to companies having no financial standing and being controlled by them. The companies to which loans were disbursed willfully defaulted in repayments and caused a loss to RFL to the tune of Rs 2,397 crore,” Mishra alleged. PTI
Here's a Bar & Bench story that contains the High Court order. It appears to be an enforcement of a May order against the same 55 garnishee parties, with the difference being that now they have to pay up within 30 days and provide a detailed description of all of their assets and income.