This LiiStudio story is about a month old, but I'm sharing it because it provides good background material on the fascinating drama surrounding the Singh brothers and their relative, Gurinder Singh Dhillon, the guru of Radha Soami Satsang Beas.
There are numerous strands in the tangled web of this tale of fraud, loans gone bad, and deceit.
Hopefully some of the strands will be made more clear in the upcoming November 14 hearing of the High Court of Delhi involving those responsible for payment of a $500 million award to a Japanese company that bought the Singh brothers' pharmaceutical firm.
Below I've highlighted in red mentions of the RSSB guru, since many people who visit this blog are interested in how the Dhillon family fits into these cases.
The key questions that remain to be answered in this mess appear to be these:
(1) Who were the ultimate beneficiaries of the money that was fraudulently siphoned from Religare and Fortis into shell companies? There's reason to believe that these beneficiaries included members of the Dhillon family and their close associates. This is relevant to the Daiichi award, since the Singh brothers, or at least Malvinder, are claiming the money needed to pay the award resides with other people.
(2) Were those beneficiaries involved in the financial fraud? If so, they could be charged as co-conspirators.
(3) Does the Dhillon family need to repay the hundreds of millions of dollars that reportedly went into their pockets from the Singh brothers following the sale of Ranbaxy? Was this a gift from the Singh brothers or a loan?
(4) Assuming the Dhillon family owes money to the Singh brothers, do they have the requisite assets to repay those loans? Documents required by the High Court of Delhi seemingly would answer this question.
New Delhi: Malvinder Mohan Singh and his youthful brother Shivinder Mohan Singh, former promoters of pharmacy firm Ranbaxy, hospital chain Fortis and monetary companies agency Religare, have been this week arrested by the Financial Offences Wing (EOW) of the Delhi Police for allegedly dishonest and inflicting a lack of Rs 2,397 crore to Religare Finvest Ltd (RFL), a subsidiary of Religare Enterprises.
The police additionally arrested former Religare Finvest MD Kavi Arora, in addition to ex-group CFO Anil Saxena and MD Sunil Godhwani.
The Singh brothers have been as soon as profitable businessmen who featured on Forbes’ listing of billionaires, working India’s main pharma firm. However they’re now in police custody, with a number of instances of dishonest and fraud, and allegations of siphoning cash utilizing a fancy internet of firms.
Whereas their present arrest is for alleged fraud associated to Religare Finvest, they’ve two extra investigations pending towards them. One is an allegation of siphoning round Rs 472 crore from Fortis Healthcare, whereas the opposite is about preserving Japanese drug main Daiichi Sankyo in the dead of night whereas promoting Ranbaxy to it that a US drug regulator was probing the agency. A Singapore tribunal had handed a Rs three,500 crore award in favour of Daiichi, which the Singh brothers are but to pay.
Who’re the Singh brothers?
Malvinder and Shivinder are grandsons of Bhai Mohan Singh, a businessman from Rawalpindi who settled in Delhi after Partition.
Bhai Mohan Singh took over the debt-ridden Ranbaxy from his cousins Ranbir and Gurbax Singh. Mohan Singh’s son Parvinder drove the agency to the highest of the Indian pharmaceutical business.
Parvinder’s sons Malvinder and Shivinder each graduated from Duke College’s Fuqua College of Enterprise within the US, and formally took over the corporate after Parvinder’s dying in 1999. They bought it to Daiichi Sankyo in 2008 for Rs 9,576 crore.
In accordance with officers, with the cash obtained from Ranbaxy’s sale, the brothers spent Rs 2,000 crore to repay loans, invested Rs 1,750 crore in Religare, and put Rs 2,230 crore in Fortis.
The remaining Rs 2,700 crore was reportedly transferred to Gurinder Singh Dhillon, head of the religious sect Radha Soami Satsang Beas, and his household.
The Religare Finvest case
In accordance with officers within the EOW, the Singh brothers, who have been in “absolute control” of Religare Enterprises Restricted (REL) and its subsidiaries, put Religare Finvest Restricted (RFL) in poor monetary situation by distributing loans to firms having no monetary standing, which they themselves managed.
“These companies then wilfully defaulted on repayments, causing a loss to RFL to the tune of Rs 2,397 crore,” an official defined.
In November 2016 and January 2017, RFL invested Rs 750 crore as fastened deposits within the Lakshmi Vilas Financial institution (LVB).
In July 2017, RFL reportedly found that LVB credited the proceeds of the deposits to RFL’s present account, and in addition debited an quantity of Rs 724 crore with out preserving RFL within the loop.
When RFL discovered in regards to the transfer, it instantly contacted the financial institution and in addition despatched authorized notices to the financial institution to re-institute the FDs, stating it had not given any go-ahead to dissolve them. Following a authorized discover, the financial institution agreed to revive the FDs.
5 months later, in December 2017, RFL reportedly obtained a communication from the financial institution, stating that loans amounting to Rs 532 crore and Rs 174.eight crore got to 2 firms held by the Singh brothers — RHC Holding and Ranchem Pvt Ltd respectively, factoring the FDs as collateral.
RFL then claimed that LVB didn’t ship it any info earlier than putting the FDs as safety towards the loans disbursed to the 2 firms.
RFL then filed a swimsuit within the Delhi Excessive Courtroom towards the financial institution for voluntarily placing the FDs as a assure towards a mortgage that it was not conscious of.
“RFL stated it had not executed any documentation for putting the FDs towards any loans that were wrongfully disbursed to the two companies controlled by Singh brothers,” an official defined.
RFL additionally made a proper criticism on this regard to EOW, and a case was registered. Following this, the Reserve Financial institution of India positioned LVB beneath its immediate corrective motion framework.
The Daiichi-Ranbaxy case
Malvinder and Shivinder have additionally been accused of siphoning funds via a fancy “web of companies” by Daiichi Sankyo, which additionally alleged that the brothers hadn’t disclosed the US drug regulator’s probe towards Ranbaxy on the time of sale.
Daiichi has additionally claimed that ANR Securities, RHC Holding, Ranchem and Malvinder maintain Prius Actual Property, wherein they put funds amounting to Rs 1,429.50 crore via debentures.
Daiichi additionally alleged that the brothers fraudulently diverted a sum of Rs 1,407.33 crore in Shimal Healthcare (which they personal collectively) via debentures and desire shares, and that this firm was additionally used to divert funds to different entities.
A debenture is a long-term bond or an unsecured mortgage issued by an organization with out pledging an asset, whereas desire share is a share which entitles the holder to a hard and fast dividend.
Daiichi is but to get well the Rs three,500 crore awarded to it by a Singapore tribunal, and has urged the Delhi Excessive Courtroom to connect the Singh brothers’ properties to get well the dues.
Case involving Fortis Healthcare
One other case entails Fortis Healthcare, which, in February this 12 months, had written to market regulator Securities and Trade Board of India to provoke authorized proceedings towards the brothers and get well Rs 472 crore, which have been allegedly taken out of the corporate via inter-corporate deposits to companies linked to them.
An inter-corporate deposit is an unsecured borrowing by corporates from different company entities. A company agency having surplus funds can thus lend to a different in want.
In October 2018, SEBI discovered the diversion of those funds to be “fraudulent” and directed Malvinder and Shivinder to repay this quantity, together with extra curiosity, to Fortis by January 2019. The brothers, nevertheless, did not make these funds.
What the brothers have mentioned in courtroom
Malvinder’s lawyer Manu Sharma informed a courtroom Friday that it was ‘Baba’ Dhillon, not his shopper, who was the beneficiary of the transactions.
“They don’t go after that person to whose doorstep the money leads because he’s heading some great religious organisation,” Sharma mentioned in courtroom.
Sharma additionally mentioned his shopper didn’t have a “single penny”.
Nonetheless, Shivinder, who has not engaged a lawyer, has mentioned he would “cooperate with the investigation and follow whatever order the court gives”.