Well, the Bollywood'ish financial fraud drama involving the Singh brothers and their relative, Gurinder Singh Dhillon, the guru of Radha Soami Satsang Beas, has taken another turn -- with more curves in the legal road seemingly lying ahead.
A story in The Economic Times (below) says that India's Enforcement Directorate has just arrested Malvinder Singh and Sunil Godhwani, who previously was the guru's right hand man and personal financial adviser.
Previously Malvinder and Shivinder Singh, along with Godhwani, had been arrested by the Economic Offenses Wing (EOW) of the Delhi police. So now they've been re-arrested by an organization that investigates money laundering and other illegal financial acts.
It sounds from the story that one purpose of the new arrests is "custodial interrogation." This makes sense, since there are important questions remaining to be answered in this case.
(1) Malvinder has told the High Court of Delhi that the $500 million or so owed by the Singh brothers in a settlement related to the sale of their pharmaceutical firm, Ranbaxy, resides in 55 entities (people and shell companies), including the Dhillon family. The High Court had ordered these entities to repay the money. A High Court hearing was supposed to be held today on this. So far there's no word if it happened. If it didn't, why not?
(2) The story below says that money went to various persons, then siphoned off. Previously progress seems to have been made on tracing the money flows. Likely this will continue under the Enforcement Directorate. Pretty clearly, Malvinder and Godhwani didn't engage in fraud for their own benefit, since the money didn't end up with them.
So it's important to learn who ended up with the money, and who orchestrated the financial fraud. Malvinder's lawyer has called for the arrest of the RSSB guru. Reportedly Dhillon, his family, and close associates ended up with most of the illegally siphoned money.
(3) Why is it taking so long for this case to be resolved? Yes, it is complex, involving numerous people, corporations, shell companies, and investigative organizations. But it sure seems like skilled forensic accountants could have figured out the money flows by now, since some details of the financial fraud activity have been reported in the Indian financial press.
I'm wondering how cooperative some central actors in the fraud have been, notably Sunil Godhwani. Given his close connections to the RSSB guru, is he refusing to testify about his role in the fraud, who orchestrated it, and why it was committed?
Here's today's The Economic Times story.
The ED on Thursday arrested former Fortis HealthcareNSE -0.35 %promoter Malvinder Singh and former CMD of Religare Enterprises Ltd (REL) Sunil Godhwani in a money-laundering case related to alleged misappropriation of funds of Religare Finvest Ltd (RFL).
The Enforcement Directorate (ED) took both the accused in its custody inside the Tihar central jail here, where they are currently lodged in a case filed by the Delhi Police in relation to the alleged scam.
A court here was informed about the development by the agency's lawyer, Nitesh Rana, who urged it to issue a production warrant against the accused for seeking their custodial interrogation.
The court, however, directed that the accused be produced before a metropolitan magistrate in the central jail itself since trial prisoners are not being produced in the Saket District Court, either physically or through video-conference, due to the ongoing lawyers' strike.
"The court is informed that accused Malvinder Mohan Singh and Sunil Godhwani are lodged in central jail numbers 8 and 7 respectively at Tihar Jail. Accordingly, the applications filed by the ED be put up before the concerned duty MM, Tihar jail tomorrow, i.e, November 15, for disposal in accordance with law," Special Judge Sandeep Yadav said.
Both Singh and Godhwani are accused of laundering money, punishable under sections 3 and 4 of the Prevention of Money Laundering Act, the ED said.
They were in judicial custody along with Singh's brother Shivinder and two others -- Kavi Arora and Anil Saxena -- in a case filed by the Economic Offences Wing (EOW) of the Delhi Police.
RFL is a group firm of REL, which was earlier promoted by the Singh brothers.
According to the ED, both the accused, along with others, transferred an amount of approximately Rs 1,000 crore to various persons from entities linked to the corporate loan book and finally, the money was siphoned off.
The agency started its investigation in the matter on the basis of a case lodged by the Delhi Police.
Malvinder (46), Shivinder (44), Godhwani (58), Arora (48) and Saxena were arrested by the Delhi Police's EOW for allegedly diverting the money and investing in other companies.
The EOW registered an FIR in March after it received a complaint from RFL's Manpreet Suri against Shivinder, Godhwani and others, alleging that loans were taken by them while managing the firm but the money was invested in other companies.
"They put RFL in a poor financial condition by disbursing loans to companies with no financial standing and controlled by them. The companies to which the loans were disbursed willfully defaulted in repayments and caused a loss to RFL to the tune of Rs 2,397 crore," the police had alleged.