It's difficult to know what to make of a development in the financial fraud saga involving the Singh brothers, Sunil Godhwani, and Gurinder Singh Dhillon, the guru of Radha Soami Satsang Beas.
Godhwani was the guru's right-hand man and personal financial advisor.
An India Today story (see below) says that India's Enforcement Directorate has charged Shivinder and Malvinder Singh, plus Godhwani, with money laundering. But details are lacking as to how and why this occurred, and who the ultimate beneficiary was of the laundered funds.
Also, the story says that the amount of money in question is only Rs 150 crore, which I believe is about $20 million. Yet the total amount Religare Finvest Ltd. reportedly lost via fraudulently diverted funds was 2,397 crore, or over $300 million. So this seems to be an initial step by the Enforcement Directorate, not a final one.
The company involved here, Star Artworks Pvt Ltd, was one of 21 entities mentioned in a March 2019 Business Today story that I cited in a blog post, "RSSB guru had better have a big bank balance."
I titled the post the way I did because it's been reported that the Dhillon family was the recipient of hundreds of millions of dollars from companies once controlled by the Singh brothers and Godhwani, money that now is being required to be paid back by Indian courts.
A graphic I included in the blog post indicated that the Dhillon family got huge amounts of money via loans from RHC Holding, a holding company of Malvinder and Shivinder Singh. The address of Star Artworks Pvt Ltd. is the same as RHC Holding Pvt Ltd, which points to the tangled web of shell companies and financial transactions that authorities in India are trying to unravel.
Here's the January 10 India Today story.
The Enforcement Directorate Friday filed a charge sheet against former Fortis Healthcare promoters Shivinder Singh and his brother Malvinder before a Delhi court in a case related to alleged misappropriation of funds at Religare Finvest Ltd (RFL).
The final report, filed before Additional Sessions Judge Sandeep Yadav, also named former CMD of Religare Enterprises Ltd (REL) Sunil Godhwani (58) as an accused.
In the charge sheet, filed by ED's Special Public Prosecutor Nitesh Rana, the probe agency has accused all three of money laundering, punishable under sections 3 and 4 of the Prevention of Money Laundering Act.
The court took cognisance of the charge sheet and issued production warrant against them for January 20. All the three accused are currently in judicial custody.
The ED also named RHC Holdings Pvt Ltd as an accused in its charge sheet.
It said the accused had acquired proceeds of crime to the tune of Rs 150 crore through Star Artworks Pvt Ltd, derived out of criminal activities and utilised the amount in repayment of its existing liability towards RFL by projecting it as untainted.
"Therefore, accused persons were involved in acquisition and utilization of proceeds of crime generated out of criminal activities and its projection as untainted property, thereby have committed the offence of money laundering as defined under sections of PMLA," said the charge sheet, filed through advocate A R Aditya.
The ED had alleged that both the brothers, along with others, transferred an amount of about Rs 1,000 crore to various persons from entities linked to the corporate loan book and finally, the money was siphoned off.
The EOW registered an FIR 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.
RFL said in a press release that since the time the offence took place, the company has undergone a complete revamp of its Board of Directors.
"All efforts continue to be made to rebuild the business, mobilise fresh capital and correct the transgression and legacy issues of the past. The management and internal controls at the Group and all subsidiaries' level have also been revamped, bringing in much needed assurance to employees about a stable and action-oriented management," it said.