RSSB guru admits to financial deals with Singh brothers

A commenter on this blog recently shared a link to this story in The Indian Express. It's a prelude to the November 14 hearing before  the High Court of Delhi, where parties who allegedly owe money to the Singh brothers (Malvinder and Shivinder) have been ordered to appear as part of the $500 million settlement award to Daiichi.

Download Financial deals with Ranbaxy brothers admits Beas sect head | Business News The Indian Express

l found it sort of curious that Gurinder Singh Dhillon, the RSSB guru, filed an affidavit admitting to being part of an illegal financial transaction just two days prior to the High Court hearing. It's also interesting that reportedly the guru has said that he didn't receive any money from anyone but his parents, since it appears that Dhillon was a beneficiary of the deal described below. 

THE HEAD of Radha Soami Satsang Beas, Gurinder Singh Dhillon, has, for the first time, admitted to financial transactions between himself and ex-Religare Enterprises (REL) promoters Malvinder and Shivinder Singh.

In an affidavit filed with the Delhi High Court dated November 12 and reviewed by The Indian Express, Dhillon admitted that the Singh brothers had in 2010, through RHC Holding (a company controlled by the brothers), approached him and his family to subscribe to a rights issue of REL that was not fully subscribed “at that moment”. A part of the rights issue was funded by RHC and the Singh brothers, who Radha Soami sect head admits to financial deals with Ranbaxy brothers spent a total of Rs 440 crore on the transaction.

“It was suggested by them (Malvinder and Shivinder Singh) that they would finance the deponent (Dhillon) and his family to subscribe to the rights issue. It was agreed that the deponent and his family members would not be made liable to repay any amount or interest in respect of the said finance management since it was being done at the behest of RHC, Malvinder Mohan Singh and Shivinder Mohan Singh,” Dhillon has said in his affidavit.

“It was also agreed upon that the shares being sold and/ or disposed of, if the price realised was higher than the subscribed prices, the upside would be shared 50:50 between RHC and the members of the deponent’s family (Dhillons) who had subscribed to the shares,” he added.

He goes on to admit that his sons, Gurpreet Singh Dhillon and Gurkirat Singh Dhillon, were given possession of over 61 lakh shares each through the subscription.

“On the basis of this verbal agreement, on 11.02.2010, Respondent No. 19 (RHC) transferred Rs 219.5 crore each to GP (Gurpreet) and GK (Gurkirat), which was then used to subscribe to the rights issue, resulting in an allotment of 61,83,013 shares of REL to each of GP and GK. The entire transaction was handled by Respondent No. 19’s team,” said Dhillon.

Dhillon has claimed that as the two families were then in a “very close relationship”, they did not record any written agreement. He has absolved his family members from any involvement in the financial transactions carried out by him. He, however, distanced himself from allegations of fund diversion by claiming that the brothers, as well as RHC had “deliberately” avoided giving a clear picture of all transactions between them as it would show “that nothing whatsoever is owed by the deponent (Dhillon) and his family members” to RHC or any of its subsidiaries.

The transactions alleged by Dhillon are in violation of Securities and Exchange Bureau of India (SEBI) norms on promoters’ role in rights issues of companies.

The religious sect head also states in his affidavit that in 2006, he had, on behalf of his sons, purchased REL shares worth Rs 12.50 crore. Of this, Rs 6 crore was loaned to Gurpreet and Gurkirat by RHC. A further sum of Rs 35 crore was taken out by his sons as loans for personal purposes, but was subsequently returned in 2011, Dhillon claimed in his affidavit.

Queries sent to RHC and Dhillon remained unanswered by press time Wednesday.

Earlier, Malvinder Singh had, in an affidavit to the High Court and Supreme Court, alleged that Dhillon and persons associated with him had diverted close to Rs 6,000 crore from RHC. The monies were loans and advances given by RHC and the Singh brothers to companies such as Prius Real Estate, as well as to Sunil Godhwani, and Dhillon, Malvinder Singh had claimed in his affidavit.

In October, based on the submissions made by Malvinder Singh, the Delhi High Court had asked all the 55 garnishees to deposit the money they owed to the Singh brothers and RHC, within 30 days. The court had also asked Dhillon and his family members to be personally present in the court on November 14. Garnishees are companies that owe money to RHC, which is currently locked in litigation with Japanese drug-maker Daiichi Sankyo.

Daiichi has alleged the Singh brothers concealed information regarding wrongdoing at Ranbaxy when selling the firm to it in 2008 and is seeking over Rs 3,600 crore in damages from them.

Comments

[Spence Tepper]

And so it begins...

'Yes they gave me the discount options, they offered me the chance to buy discounted stock, and then they gave me the money from RHC to buy the stock.... and then sell them at profit.... And keep half the profits... Because they wanted to. I was told it was all approved! It wasn't a loan it was a business gift... '

So now Gurinder is admitting the transfer of funds, because the bank transfers are obviously there, but trying to claim it as a gift.

Well you can't have it both ways. You either borrowed the money and need to repay it, or you accepted stolen goods and need to repay it.

And up to now, hiding the facts.

Bottom line, Baba Ji, you need to either pay your bills or return the stolen money, which is now your liability.

When you make excuses in the face of hard evidence, at the eleventh hour, it just looks sleazy.

[gsd god man]

the brothers gave me the money and never expected it back coz they told me i dont own them anything, i am innocent

[Jesse]

I couldn't remember the name of the scribe of Guru Arjan Dev, and the only contemporary of the Sikh Gurus whose writings are considered acceptable to be read in a Gurdwara, so I looked him up yesterday to remember his name. it happens to be Bhai Gurdas.

What was timely about my online search is that one of his quotes is featured on the SikhiWiki page, which is as follows-

Pauri 15 (Yoga-technique for Gurmukh)
Guru has explained the technique of yoga to the Sikh that be detached amidst all the hopes and cravings.
Eat less food and drink little water. Speak less and do not talk nonsensical.
Sleep less and do not be caught in any infatuation. Do not indulge in greed even in dreams.

[Land Grab Singh.]

This is just a trailer.
Wait till my land grabbing movie starts.
Had to do a lot of work,was not easy getting rid of Ranbaxy CEO Brar.
Good job i had some dodgy friends to help me.

[JS]

And so it begins...

[Michael]

Not quite the blockbuster I was expecting.
The Baba admits to being involved in financial transactions as some sort of innocent bystander.
Bit of a damp squib really.

[Mr.kumar]

May the supreme lord do the justice in ghis matter.
Only then, millions of people will get wisdome

[Cocky me]

Bottom line, Baba Ji, you need to either pay your bills or return the stolen money, which is now your liability.

When you make excuses in the face of hard evidence, at the eleventh hour, it just looks sleazy.

Posted by: Spence Tepper | November 13, 2019 at 07:45 PM

Monies were 'stolen' from whom and by whom?

You seem to be an expert at unravelling structured financial transactions. In this deal, can you break it down into it's components clearing showing the parties involved, their respective roles, the amount involved, the flow of funds, whats the current location of the funds and who was the real owner of the shares subscribed at the behest of Singh Bros!!!

In my extremely limited understanding I find it difficult to see it no different from Singh Bros wanting to utilize the rights issue to enrich themselves, using funds from RHC which they controlled (in contravention of laws) by getting close family members (so extremely trustworthy and reliable) to lend their names of course with fabulous share of 50% of profit.

[R. Sharman]

It’s extremely suspicious that one of the most IMPORTANT figures in the spiritual world who:

• comes from a well-respected line of Saints (living masters/ Gods)
• has 4 million followers who see him as God in human form in 80 countries,
• someone with DIVINE INTERVENTION who has SUPER POWERS

The PERPLEXING question arises, Why would Gurinder Dhillon accept a gift for 3000-6000 crores (with no legal contract) and distributes the funds to his SONS and his own personal business interests?

Why doesn’t Gurinder (AKA Baba, Master, Physical form of God) OWE an explanation to his followers? After all they have DEDICATED their lives and fully TRUST him and the path he is representing. Maybe he should be TRANSPARENT in his yearly SATSANGS and actually give some time to his followers rather than walking past them with his THUG bodyguards (Joe Johal and Raj Johal) who have themselves accumulated millions from VAT fraud.

Furthermore I thought Sant Mat philosophy states living Masters will earn their own money and live off that ONLY! But why would a human God need to be involved in complex multi-billion dollar deals when he is in the same form that CREATED THE UNIVERSE?

These are VALID and fundamental questions that people want answers to. Don’t forget Radha Swami organisation says it welcomes ANY questions!

[DEVRAJ KATARIA]

When the deal within the family and they don't prepare the papers as faith on singh brothers. There's no fault of Babaji.If they have any information he told in affidavit. If who don't know the RSSB please visit once,you forget the
all about "World"

[Guru]

ED arrests Malvinder Singh.

https://economictimes.indiatimes.com/news/politics-and-nation/ed-arrests-ex-fortis-healthcare-promoter-malvinder-singh-sunil-godhwani-in-rfl-case/articleshow/72056247.cms

[Georgy Porgy]

Oh yes good shall prevail. The white knight knows he is innocent 😇 .

The persecutors and stitch-up artists will be karma’d. Not good.

[Georgy Porgy]

Why do you need to pay your bills or return stolen money, if it’s a gift?

The company had racked up the debt - not the guru. Guru didn’t force anyone to give him a gift.

If its a gift and been authorized, got nothing to do with the receiver.

Question then is was the person giving the gift authorized to do so. If he was, then is there even any issue at all? Even for the giver?

Yip, sounds like more nonsense being read into these articles as per usual.

[One Initiated]

Dear Spence,

I think you need to re-read many things again.
And even if you put your own opinions and misinterpreted things in quotation marks to represent as Master said these things, will not change anything.

Let me help you with understanding a few things in simpler language and example by downsizing the figures with a factor:

Malvinder and his team allocated $100 in total, $50 to each of the son GK and GP to buy the options to be exercised later, and if the exercise price was in profit, the profit be divided in half.
i.e. if the exercise price would be $110 the $2.5 will go to each GK and GP and $5 to Malvinder - the $100 is out of equation it is not owed by GK and GP.

And now Malvinder is asking for even that $100 back and saying only then he would be able to pay $10k (100 times) to Daiichi, which does not make any slightest sense.

If it's an affidavit than it surely is backed by the bank statements to the tunes of only $100, keep your trust, don't get carried away.

This is not even clearly known whether those options have been exercised or not.

And what are the details of the rest of the $9.9k fund is not evident.

Thus your support to the actual offending person Malvinder is of no use literally.

The other account you missed entirely:
that GK and GP took loan from RHC for 35cr and righteously paid it back in full in 2011.

And one thing I really could not understand,
how in the universe the prostitute and the whiskey is sickening you,
if you are connected with inner master.
you still care for the dirt when diving in the gold ?

[Guru Rakha]

Any news about Today Dhillon family court appearance?

[OMG!]

Malvinder Singh arrested in money laundering case....

https://www.ndtv.com/india-news/ex-ranbaxy-promoter-malvinder-singh-arrested-by-enforcement-directorate-in-money-laundering-case-2132544

[Anon]

One initiated I agree Spence does tend to conjure up his own hypothesis and interpretations of everything presented.
In response to your question about not knowing what happened to the 100$ in shares after the agreement well those were pledged to the lenders to facilitate payment of loans taken by the brothers. The only thing is the value was not 100 it was at a loss and this could be the reason Malvinder is claiming he is owed money. It was a verbal agreement that it would be bought under their names and it realized a loss so he is probably claiming they owe him the money lost.
Again it goes back down to the fact that they have lost the money and are trying to now put blame wherever they can or to whoever they feel has money to pay them.

[Jesse]

"Why do you need to pay your bills or return stolen money, if it’s a gift?"

Wtf are you talking about Georgy? In pretty much any part of the civilized world it's illegal to knowingly accept stolen goods.

If you don't think he knew something shady was going on then ask yourself why he didn't have cookies contracts for multimillion dollar "loans." Only mafias operate that way.

Imagine thinking that incentivizing criminal acts is a good thing. Then imagine drooling on yourself and daydreaming about bubbles and toys. Now you know what it's like to have the brain of someone like Georgy Porgy.

[Cocky me]

Bottom line, Baba Ji, you need to either pay your bills or return the stolen money, which is now your liability.

When you make excuses in the face of hard evidence, at the eleventh hour, it just looks sleazy.

Posted by: Spence Tepper | November 13, 2019 at 07:45 PM

Monies were 'stolen' from whom and by whom?

You seem to be an expert at unravelling structured financial transactions. In this deal, can you break it down into it's components clearing showing the parties involved, their respective roles, the amount involved, the flow of funds, whats the current location of the funds and who was the real owner of the shares subscribed at the behest of Singh Bros!!!

In my extremely limited understanding I find it difficult to see it no different from Singh Bros wanting to utilize the rights issue to enrich themselves, using funds from RHC which they controlled (in contravention of laws) by getting close family members (so extremely trustworthy and reliable) to lend their names of course with fabulous share of 50% of profit.

Posted by: Cocky me | November 14, 2019 at 03:25 AM

[Neon]

Holy crap, from now on we just have to disregard Georgy Porgy's comments. Insane one can have a mindset supporting this. He's picking at straws now.

[Spence Tepper]

What Gurinder was given illegally, stolen money, rights illegally allocated, must be returned.

It's that simple.

Baba Ji pay your debts.

[Reema Awatani]

I will chamt and meditate the truth get revealed, he is the saint of the saints, it is blessing to have Babaji with us. It is really disheartening that how his own close ppl have conspired things.
I chant for his health, well being and protection from all the evil forces around him.
Babaji is very mindful, loving and logical
Whatever happens only request to ppl not write anything if they dont have deep knowledge about the core problems
Pls dont blame, if you understand the path you will fall in love with him.
He is kind, generous and loving father.
He has deep awakening of sprituality and he is very responsible
Pls humble request is if you cant stand with him, if you dont belong to this path, pls dont write anything if u dont have any knowledge about it.

[Maria de La Torre]

More delays, next hearing February 5!
https://m.economictimes.com/industry/healthcare/biotech/pharmaceuticals/radha-soami-chief-admits-to-financial-dealings-with-singh-brothers/articleshow/72058229.cms

[Jesse]

"why he didn't have cookies contracts"

My phone inserts words into sentences that I never intended to write. Cookies contracts sounds kind of cool though, so I may possibly start using that expression intentionally.

[Michael]

Neon
Just because you disagree with Georgy Porgy, do not discount his point.
The Baba is gonna walk away from this.

It is clear that Malvinder was pulling some scam. But there is nothing concrete to place GSD as the ringleader, as many have claimed here.
A get richer quick scheme backfired.

[Spence Tepper]

Hi One initiated
Please read the article again. 440 crore was loaned illegally to Gurinder and remains unpaid. Gurinder owes that much, based upon his own admission.

Further sums of 6 and 38 crore were also taken as loans and returned, according to Gurinder.

But at this point, how can you trust him?

[Spence Tepper]

As for Gurinder's actual sale of the stock and any profits generated, notice the curious absence of any reference. You infer money was lost. But let's consider with equal probability profits were made and then sheltered. That all belongs to RHC, and is owed.

[Avi]

"In my extremely limited understanding I find it difficult to see it no different from Singh Bros wanting to utilize the rights issue to enrich themselves, using funds from RHC which they controlled (in contravention of laws) by getting close family members (so extremely trustworthy and reliable) to lend their names of course with fabulous share of 50% of profit."
Posted by: Cocky me | November 14, 2019 at 03:25 AM

Even if we go by your argument above, do you agree that GSD was at the very least greedy in wanting the other 50% for his family by agreeing to be involved in this crooked scheme?

[Avi]

In fact, GSD did not only want to get the 50% share of the "profit" but by his own admission, he did get that money for his family.

And then he keeps repeating in his "satsangs" that money is the greatest evil.

[PJ]

Re the Johals. I'm super critical of RSSB and haynes but I have to say my experience with them was always positive.

I worked and played football with Raj on several occasions and he is very good company! and a generous gent. Not a trace of 'thug'.

His father and Joe were also very nice to me so that was my experience.

[anami]

I think the only gift part was that the Dhillons could keep half of any realized profit in the sale of their REL shares down the line. The Rs 440 crore given out to buy stock in the rights issue were basically interest free and fee free loans, but RHC/Malvinder/Shivinder shouldn't have made them. "The transactions alleged by Dhillon are in violation of Securities and Exchange Bureau of India (SEBI) norms on promoters’ role in rights issues of companies."

From my read, Baba Ji chose not to benefit directly in this arrangement, agreeing instead on behalf of sons Gurpreet and Gurkirat. “'On the basis of this verbal agreement, on 11.02.2010, Respondent No. 19 (RHC) transferred Rs 219.5 crore each to GP (Gurpreet) and GK (Gurkirat), which was then used to subscribe to the rights issue, resulting in an allotment of 61,83,013 shares of REL to each of GP and GK. The entire transaction was handled by Respondent No. 19’s team,' said Dhillon."

The point of a rights issue (in my limited understanding) is to raise capital and make a stock (REL in this case) look like something insiders want to buy. Insiders weren't buying though, because when they pitched the deal to Baba Ji, the rights issue was undersubscribed. Financing the Dhillons to buy in was a sneaky way to move the offer to full subscription artificially, so that it could go through. They'd raise less capital than they wanted, but a successful float could at least make REL look to the world like a attractive investment and bolster the stock price.

However, if you look up the stock chart for Religare Enterprises, you'll see almost nothing but downside from November 2, 2010. GP and GK's shares were probably bought at a discount, but the only way they could've realized a profit was to dump them right away. However, I think there are usually wait periods in these deals. Besides, SEBI would've noticed, and the deception come to light, so they would've been advised not to sell big blocks all at once. REL has lost 90% of its value since then. If they didn't sell long ago, that money's gone gone gone.

Who's to blame? Baba Ji's taking some of it by absolving GP and GK of responsibility, but he pretty much points the finger at RHC/Malvinder/Shivinder. "He [Baba Ji], however, distanced himself from allegations of fund diversion by claiming that the brothers, as well as RHC had 'deliberately' avoided giving a clear picture of all transactions between them as it would show 'that nothing whatsoever is owed by the deponent (Dhillon) and his family members' to RHC or any of its subsidiaries." In other words, RHC/Malvinder/Shivinder conspired to keep the Dhillon name out of it, so it's obvious they knew they were going around the law, but did Baba Ji? On his end was it a matter of ignorance, of privacy or of secrecy? Burning question.

Rs 440 crore is a big sum, but the degree of greed can be calculated really only against the fantasy of potential profits on that amount and half at that. More than anything, I think it was a Don't-worry-the-market-will-recover-What-could-possibly-go-wrong-We're-family-You-help-us-we'll-help you-Have-faith moment.

What about the other Rs 5560 crore? More and more and more of the same? Could be. If they fumbled Rs 440 crore, how could they handle the full Rs 6000 crore?

[Abhishek Chauhan]

Please don't write anything if you don't know about babaji.
It's just karma & they will come out clean in this mess. Just wait & see.

[One Initiated]

Unfortunately you are not the judge Spence,
the judge and the courts will decide how much is owed by whom.

You are again missing the point completely Spence,
For me the brothel did not matter at once.

I am not waiting for the court's decision to keep my trust. It's no fun that way,
the house in the Astral will cost much more if you want to see it first before buying.

Not only at this point Spence,
I will keep trusting HIM till my last breath,
even if all the World Bank vaults are being operated by Him.

Love to all.

[Spence Tepper]

Hi Anami
If Shivinder et al can cook the books by giving out options there needn't have been any waiting period at all. This would have been pure theft and pure profit. And it would explain in past the rapid turn of short term loans. These may have cycled through the sale of stock option series after series, the sales with profit from each funding even more fraudulently obtained options and their short term sale.

Gurinder, in his efforts to explain away what the court already has evidence of, and which therefore could not be denied, has drawn attention to what he didn't address:The sale and sheltering of profits, and the entire pathway of all the funds from the sale of Ranbaxy.

The court has now invited Daiichi to submit their own interrogatory to each garnishee. This was a very smart move, because they have deep pockets to fund a good investigative legal and financial team. With the courts ' backing Daiichi can use any unanswered questions as the basis to request subpeona of any documents or testimony they wish. The court has brought Daiichi in as partners to the investigation and opened the door to the entire RSSB/ Religare / Fortis / Ranbaxy dark web. And having set this precident, it will not be long before the new RHC board is also invited to do the same for the identified garnishees in their own case against Malvinder, Shivinder, Sunhil et al.

As I had predicted, the case is now going down to the garnishee level and in some cases will become individual law suits against the more agregious of the garnishees.

[Spence Tepper]

In fact, Anami, the sale of tens of thousands of shares at below market value by Gurinder et al would be corporate theft on a grand scale because this would degrade the publicity traded value of the stock. This would help explain the weakened stock values, as part of the total picture of driving both Fortis and RHC to the brink of insolvency, tearing these companies apart for personal gain.

[Spence Tepper]

Hi One Initiated
While your sentiment to love your Guru, facts be dammed, sounds noble, it isn't. Because you are ignoring the harm being done, and that is a violation of the first principle of spirituality, the minimum condition : do no harm.

It is really only yourself you love. Because you are defending the perfection of your judgment, which however, like mine, is flawed.

I can love someone and still hold them accountable for their actions. I can love someone and be angry with them. I can love someone who is very very flawed.and I can love someone and forgive them. All these I do for myself as well. But it seems you can only love someone you deem as perfect. Does that mean you haven't forgiven yourself yet?

You would have to know what perfection really is, One Initiated. You might be able to, but not I.

It's just loving yourself with the guru as the excuse, the stone icon. He is just an icon to you. And your love, tradition only.

But why not just love yourself, flaws and all directly? There is divinity in you, and that is worthy of love. Today it has Guru's face and form. But in truth it has no form at all.

But try to get to know Gurinder, inside and out. No facts need be denied.

You claim I am judging. But I'm learning and digesting and commenting that is all. My opinion is based in large part on the evidence, which seems to be piling up pretty high.

Gurinder is guilty of a few things by his own admission. Things you had refused to accept. Because a perfect Sat Guru would not be anywhere near those behaviors.

But that doesn't stop me from loving him.

So, Baba Ji, man up! Stop the sniveling excuses. Pay your debts now, while you are on the way. Before your adversary brings you up before the judgment. There is still time. How can we help you?

[JS]

Again, I ask the question; Would a true Holyman, a man of god, be involved (as he has now even admitted himself) in such financial skullduggery?

Surely, surely, in any rational thought process, the answer to that question is now absolutely “NO”!

So, consequently, it follows that this man, GSD, is nothing more than a regular person, with a regular persons flaws (greed, selfishness, nepotistic)

To the irrational followers, they will undoubtedly continue to worship him, hanging on every word he pompously spouts as he denounces “evils” such as Greed and Selfishness despite now admitting to partaking in such vices himself!

For those delusional followers demanding to see the flow of funds to the dodgy Dhillon family, these are mapped out in many, many articles (which have gone unchallenged. Why?);

https://www.bloomberg.com/news/features/2018-08-16/billionaires-and-the-guru-how-an-indian-family-lost-2-billion

It must heartbreaking to have devoted 29 years to following this charlatan which would explain the inability to comprehend the “facts”

To the rational, unbiased mind, I feel GSD is losing credibility at an alarming rate. The sheer audacity to preach goodness and righteousness but simultaneously have your snout stuffed firmly in an illegal corporate trough is beyond the pale.

Sai Baba, Ram Rahim, Gurinder Dhillon...all cut from the same cloth. The Baba’s are ten to a penny in India. Why?

[anami]

Hey, Spence.

Vicious cycle, can we say?

From my brief research, in a rights offering it's normal to offer shares at a discount to existing shareholders. That's just how rights offerings work. The unlawful part was for REL to make secret loans to GP and GK so that they could exercise the rights to buy REL. They weren't buying and selling options, they bought stock--61,83,013 shares each. Baba Ji, didn't take the deal himself but facilated for GP and GK.

I don't think the point was to ruin REL but to support it. REL could boast, "Our rights offering was fully subscribed. Our shareholders have complete faith in our future and so should the investment community. Look at all our new capital!" The problem was that it wasn't all new capital. Rs 440 crore was really just old capital that they secretly funneled to GP and GK to receive back and pretend was new capital on the balance sheets.

If all went according to plan, REL stock would rise and GP and GK could sell their shares at a profit. Then they could pay back the loans and keep half the gains, giving the other half back to Religare as agreed. Win-win, right? The ends would justify the means! Unfortunately, the stock fell and everyone lost money. GP and GK couldn't repay and REL's troubles only compounded.

Why involve Baba Ji at all? Well, he's Satguru. Surely he has the magic touch, and if he doesn't, surely his sons do or his wife or their wives! I'm speculating now, but I think that's why the Singh brothers put more and more funds into Dhillon hands--faith combined with ever increasing desperation.

So I can see why Malvinder would say, "Where's the money we loaned you?" but I can also see the Dhillons saying, "Yeah, but you guys promised we'd make money, not owe you money out of our pockets!"

Corporate theft might be the end result, but I don't think it was the original plan, at least not for the Rs 440 crore in question. As they say, the road to hell is paved with good intentions.

[Sevadars_Inc]

Again, I ask the question; Would a true Holyman, a man of god, be involved (as he has now even admitted himself) in such financial skullduggery?

Surely, surely, in any rational thought process, the answer to that question is now absolutely “NO”!

Posted by: JS | November 14, 2019 at 09:36 PM

Why tire yourself by asking the same question repeatedly. Am sure your time is precious to just waste on such mundane questions. Being benevolent, we will ensure we plug any more wastage(of your time). Nothing stops a true Holyman from involving himself in anything and it's only in instances of PSB's that the answer thrown up is 'NO'

[Spence Tepper]

Hi Anami
Your description of rights offerings is a better one than mine.

But it only makes it obvious that Gurinder knew the law was being broken by his willing participation in a get rich quick scheme.

The point of offering discounted shares to stockholders and principles, as you point out, is to get them to invest in the company and buy more shares. This stock is held at the time by the company. Sometimes the company acquires this stock by buying it back on the stock market to keep the price from dropping further.

Purchasing the stock at discount brings money into the company which may help offset what the company had to pay to buy it back.

But there are, as you point out, restrictions on the sale so that the market isn't flooded with stock sales which would again drive the value down.

A weakened company stock value results in the company offering select shareholders rights to discounted stock. But not to sell them, but hold them, helping bolster the price of the stock until it comes back up.

When Gurinder was offered the shares and the loans as gifts, which could be sold immediately for profit, it would be apparent that all this is counter to the purpose of selling subscription rights. Firstly because Gurinder isn't being asked to invest his money. Secondly, that he is being given hundreds of millions in free money.
Where did these millions come from?
Thirdly, the potential to sell these immediately, violating the restrictions of those rights.

The cycling of the loans makes sense if they are being used as day loans. It's more than just making fraudulent circulating loan payments. Now stock sites and purchase are involved. Day loans are the kind of loans investors use to move their assets from stock sale to stock purchase. They purchase the stock with a one day loan for a huge sum while they sell off other stock that is then used to pay the loan. This allows them to buy instantly at the best price. But there is a lot of visibility to these loans. Using stolen company money to do this can be part of scheme.

So watching the same money cycled across corporate accounts on the same day raises a flag that it is being used as day loans. And that raises the flag that this was to fund purchase and immediate sale of the rights options, driving weak stock values down even further. Enriching himself at theft of the company. Using rights options in this way is generally a violation of the restrictions of those options and another potential violation of the law.

When Gurinder was asked to participate in this get rich quick scheme with no risk he must have at least questioned it. Unless this is exactly what he wanted to do. Why would you offer this to me without asking me to invest in your company? Why let me to sell this at profit immediately and potentially drive your own company's already weak stock price down?

Now that Daiichi has a free hand to investigate, they will be able to bring new light to an even deeper level of fraud that Gurinder may have participated in, and has himself partially acknowledged.

[Spence Tepper]

So Anami, in short, it is not that Malvinder and Gurinder lost lots of money. On the contrary, they may have made well over a billion dollars at the expense of at least two corporations, who went to the edge of insolvency as a result.

You think Malvinder and Gurinder's fortunes followed the stock prices down.

But I suspect the exact opposite happened. They benefited by stock sales which drove the stock prices down into a tailspin, in which case the money is now being sheltered somewhere.

And this speaks to the wisdom of the court inviting Daiichi's help in the investigation.

[anami]

It could be that it accelerated into what you describe and money is hidden somewhere. I was only trying to make sense of the Rs 440 crore in the article on this thread. All will out eventually. Brian's posts from yesterday (Nov 14) already expose more funny business.

[Anon]

Hi Anami my take on the rights offering
Rights offerings mean this

“A rights issue or rights offer is a dividend of subscription rights to buy additional securities in a company made to the company's existing security holders. When the rights are for equity securities, such as shares, in a public company, it is a non-dilutive pro rata way to raise capital.“

It was disclosed that the rights were not “fully subscribed” at the time the brothers approached Babaji. They probably knew no other exsisting security holders were going to buy into it and that it would show “not
Fully subscribed” so they offered to pump in their own money and put it under the names of GK and GP(also because they were already existing security holders) they did the whole transaction themselves and if it had made a profit would have handed GK and GP 25 percent each. But it didn’t and was eventually pledged to pay off the Singh brothers own loans at a loss.
So perhaps this is why Malvinder is claiming he is owed as it was sold at a loss and he could claim that he loaned them the money whereas according to Babaji they had agreed nothing was owed not capital or interest and only if profit was made would it be split.

[anami]

Anon,

Yes, but I think some of the wording in the article is confusing. "'It was agreed that the deponent and his family members would not be made liable to repay any amount or interest in respect of the said finance management since it was being done at the behest of RHC, Malvinder Mohan Singh and Shivinder Mohan Singh,' Dhillon has said in his affidavit."

When I first read the part in bold, I thought it meant that the Dhillons would not have to repay the investment capital or any interest on it, but on second glance I think it means only that they would not have to pay for the management of the finances. Effectively, the Dhillons were receiving a loan but wouldn't have to pay customary fees or interest on it, because they were doing RHC/Malvinder/Shivinder a favor. The favor was to make REL look healthier and more in demand than it really was by artificially engineering full subscription to the rights issue.

Would the Dhillons be on the hook for the entire Rs 440 crore no matter what? Who knows? Verbal agreement.

[Michael]

Anon
Thank you for clarity on this issue.
I did not fully understand the impact of not being fully subscribed, but you have explained that in fine detail now.
This information plus the Family Letter really nail the issue for me here.
The Baba owes nobody anything.

[Anon]

Anami you say
“Yes, but I think some of the wording in the article is confusing. "'It was agreed that the deponent and his family members would not be made liable to repay any amount or interest in respect of the said finance management since it was being done at the behest of RHC, Malvinder Mohan Singh and Shivinder Mohan Singh,' Dhillon has said in his affidavit."

My understanding is that they were not to be made to pay anything on the amount given to them to buy the rights so in essence what it means is I’m financing you 100$ to buy this under your name (for the purpose mentioned) and if it goes up then we share profit and if Not then I am not responsible for principal or interest. But your right it could look like a loan as it was transferred by them under the names of GK and GP. So one side can argue it’s a loan the other side can say it’s a verbal no responsibility loan. Yes I don’t know how that will be decided either as it’s a verbal agreement. This explains why he wrote the letter to sign a family settlement as even that settlement was verbal in 2013 according to the letter . He wanted it to be put in writing.

[slave_of_GSD]

1) The point of offering discounted shares to stockholders and principles, as you point out, is to get them to invest in the company and buy more shares.

2) This stock is held at the time by the company. Sometimes the company acquires this stock by buying it back on the stock market to keep the price from dropping further.

3) Purchasing the stock at discount brings money into the company which may help offset what the company had to pay to buy it back.

Spence you mentioned the 👆3

My response

1) it's a right issue we discuss here. It just so happens that such offerings is at a discount to Current market value. Nothing stops a company to price it's issue at a premium. The idea is to successfully raise the capital required (the purpose of every rights issue) by the company!!!

2) complete bullshit. (a) A company CANNOT HOLD its own shares. Basic accounting concept Mr Accountant in your last birth. (b) shares buy back results in a reduction in the floating stock. So issued capital reduced. Get educated before posting.

3) you are clueless about rights issue vs buy backs. . Purpose of rights issue can NEVER be to offset cash utilised during any buybacks. Get educated before posting

[slave_of_GSD]

4) But there are, as you point out, restrictions on the sale so that the market isn't flooded with stock

5) A weakened company stock value results in the company offering select shareholders rights to discounted stock. But not to sell them, but hold them, helping bolster the price of the stock until it comes back up.

6) When Gurinder was offered the shares and the loans as gifts, which could be sold immediately for profit, it would be apparent that all this is counter to the purpose of selling subscription rights. Firstly because Gurinder isn't being asked to invest his money. Secondly, that he is being given hundreds of millions in free money.
Where did these millions come from?
Thirdly, the potential to sell these immediately, violating the restrictions of those rights.

Spence, then you state the 👆3 too

Me:

4) no LOCK IN period in case of rights issue. Sale or no sale, the market always factors in the dilution usually triggering a fall in share price.

5) it's shocking if you actually think that a discounted share offering is to support share price. Jesus Christ. I suppose even a kindergarten kid knows the effect of offering shares at less than current prevail price. Secondly a successful rights issue by a weakened company 🤔🤔🤔

6) (a) as previously pointed out - no lock in period in case of rights issue (b) no violation of any attendant restrictions (c) the source of funds is RHC which later emerged to have been siphoned out from RHC by Singh Bros (d) no law which states investing in a rights issue has to be from own funds.

I think it was poster cocky_me who pretty well laid it bare when he said the Dhillons just lent their names. Explains the agreement that the deponent and his family members would not be made liable to repay any amount or interest in respect of the said finance management

The right issue was not a hot offering as it was aggressively priced. Given an 'avoid' recommendations by few research houses. If I am not wrong, the Singh Bros had even stated that they would pick up the unsubscribed portion

So not an opportunity to rake in huge profits as you mention in another post.

Were Singh Bros actions unique? No. SOP in Indian Capital Markets to ensure the rights issue is successful. If 90% of issue isn't taken up all amounts have to be refunded back being one of the applicable regulatory prescription.

[Spence Tepper]

Sorry Slave,

You wrote
"A company CANNOT HOLD its own shares."

But corporations do engage in both share repurchase plans as well as rights share options. In share repurchase plans the corporation itself buys stock back from the market.

" A share repurchase is a transaction whereby a company buys back its own shares from the marketplace. A company might buy back its shares because management considers them undervalued. ..."
https://www.investopedia.com/terms/s/sharerepurchase.asp

This is what companies do to bolster their value. What they repurchase are then no longer shares. With fewer shares, the value of the stock and dividends proportional to each share goes up. This improves, at least on paper, the company's performance in the market place. This is a strategy for companies with weak performance.

And then, as the value climbs, they may encourage more long term investment by issuing new shares at option.

In rights options the corporation offers to shareholders on a limited basis the rights to purchase more stock at a discount. But now new shares are being generated. But the ex-price is automatically lower, because the value of the company is now divided up into more shares : the stock is noe diluted.

This is why the options are considered as assetts but their exercise as a liability. And this is why they often carry restrictions like a period of one or two years before the rights can be exercised. That's ok in a robust high performing company, but makes little sense in a company with soft performance, unless it is part of a scheme to handicap and rob the company.

And this is what Gurinder reports he participated in.

You wrote
"1) it's a right issue we discuss here. It just so happens that such offerings is at a discount to Current market value. Nothing stops a company to price it's issue at a premium."

It's usually at a discount, Slave. Please share a link to any company that has offered a rights issue without a discount, or without board approval. Even just one.

" In summation, rights issues are a way by which companies can raise equity capital by giving the existing shareholders the privilege to buy a specified number of new securities at a specified price within a specified time frame. The rights issue is different from bonus shares. While both of them are issued to existing shareholders, bonus shares are for free, whereas rights shares are usually at a discount. Rights issue also differs from the initial public offer or follow-on public offer as rights are issued to existing shareholders at a discounted price compared to market value while ordinary shares may be issued at face value or at a premium to the general public at large."

https://efinancemanagement.com/sources-of-finance/rights-issue-of-shares#Accounting_Treatment_for_Rights_Issue

Jury rigging rights options can dangerously dilute the value of a companies ' stock value and further the decline of a company's total market value. In a period of weak performance it makes no sense, unless your intent is to gain at the expense of the company.

[Spence Tepper]

Hi Anami
You wrote
"The favor was to make REL look healthier and more in demand than it really was by artificially engineering full subscription to the rights issue."

Selling rights happens in a healthy company that is looking for equity to expand even faster. It isn't done where the company's performance is already weak since it purposefully dilutes the stock value even further.

The more I look at this, and the cycling of funds, the more this looks like a short selling scheme where huge profits are made on company stock price declines. In this case actually causing the decline from within by diluting the stock. Clearly this was a clandestine activity geared to make all the parties rich at the company's expense.

They may have had a system of causing stock declines at RHC and Fortis by pulling financial assets out of the company, or in this case issuing rights options at the wrong time, and reaping multiples of that amount from the short sale. If this is true, the loans are merely a fraction of the money generated. With each engineered stock decline Gurinder, a Shivender et al would have grown richer and richer. The investigation will have to follow the loans and the stock transactions, as well as to uncover where the money was offshored.

But rather than the scenario that it was all lost in underperforming companies, this is beginning to look like riches were made damaging the stock value and short selling, using company siphoned funds and rotating day loans to fuel the operation. In which case the parties involved have not money today than every, but offshored to shelter accounts.

This might explain Gurinder's letter. He offers to convey all the liabilities after Malvinder returns the properties. What properties contain enough value to handle all the liabilities?

Questions to be answered in the months ahead.

[Spence Tepper]

Oops should read
"In which case the parties involved have MORE money today, sheltered in offshore properties, than ever."

[anami]

On reflection, GP and GK were probably not supposed to be liable for losses on the Rs 440 crore, because their part was to provide cover. It was understood that RHC/Malv/Shiv were the real owners. GP and GK would hold the stock in name only. Otherwise, why take the deal?

Imagine if your Cousin Zigzag showed you $100 and said, "Take this to the horse track and bet on it. I want my $100 back, but whatever you win, keep half."
What would you say? "Ziggy, I'm not stupid! You're trying to get me to assume your risk. I'm better off gambling my own money. Then at least I get to keep all the winnings! Hey, where'd you get that money anyway?"
Zigzag says, "Ssshhhhh..., don't ask, know what I mean? Okay, okay. Heh heh. You're smart, I know, I was just testing you. How about this? I only want my $100 back if you win, plus we split 50-50 on the take, like I said. If you don't do so good, just give me back whatever's left."
"Now, we're talking!" you say. "Are you sure you mean this? No tricks?"
"Sure, I'm sure!" says Cousin Zigzag. "We're family! I look up to you! Have I ever lied?"
"I don't know, Zig. Were those antibiotics real? That infection took a long time to clear."
"Sure, they're real! I make them in my own bathtub!"

Moral of the story: Get it in writing.

[Anon]

Anami you and i are understanding the incident the same way. I think it’s the same as well. Regarding the moral of your story of getting in writing from what I know Babaji saw these 2 as his own family and trusted them like how one would your own children. If your own children were in a business(a family one) you don’t ask them to sign agreements. I know my mom doesn’t ask me to sign any money related things.
That’s my understanding let’s see if it’s accurate.

[🐱]

Singh bros exploited Gurinder for their own purpose.
Brian will get nobel prize for his philosophy and journalism aka copy paste diva.

[anami]

All I know is, when Cousin Zig says, "We don't want nothin' on paper," there are other reasons. Even just that "heh heh" laugh of his means he's up to something.

[Anon]

According to the latest article(released today) on the findings on the investigation of the ED on the brothers this stood out.

“ED has also claimed that in many cases, the documentation for loans were “created only subsequently and ante-dated, thus forged”.

I suspect Malvinder forged all his ledger entries that shows the Dhillon family owed him money as well. This is what he presented in his affidavit against them. No wonder BBJ said in his affidavit that they were not aware of these ledgers and it was not shared with them.
He probably made them up. 😬

[Jesse]

I think so too, Anon. Gurinder was flying around in private jets all these years and thought the money came from heaven. All his many homes miraculously fell from the sky as far as he knew.

Who needs contracts when god drops valuable items on you from above?

[anami]

Anon,
Cousin Zig says, "Kid, where there's smoke, there's fire."
Well, he thinks everyone's a criminal, and if they aren't, they should be.
Do you have the link for that article?

[Live Life Kingsize]

Anon,

Documentation of loans is very different from ledgers.

The ED hasn't made any observation about ledgers being fictitious.

Anyways was GSD referring to RFL's ledgers in his affidavit? I think not.

Anami,

Here is one link.

https://www.google.com/amp/s/m.hindustantimes.com/v/s/m.hindustantimes.com/india-news/singh-brothers-transferred-unsecured-loans-ed-probe/story-NuI94rIi9c4ciAy7TfFP6I_amp.html%3famp_js_v=0.1&usqp=mq331AQCKAE%253D#ampf=

[Anon]

Anami

https://www.hindustantimes.com/india-news/singh-brothers-transferred-unsecured-loans-ed-probe/story-NuI94rIi9c4ciAy7TfFP6I.html

[Anon]

Live life
Yes your right documentation of loans are indeed different from ledgers. My point was that this behavior of forging documents which has come up before as well when one brother claimed the other forged his wife’s signature. Nothing proven in this case yet I’m just sayin...
No he was not referring to RFl ledgers he was referring to the ledgers Malvinder has claimed in his complaint filed in feb.