The Economic Offences Wing (EOW) of Delhi Police on Thursday, October 10, arrested businessmen Shivinder Mohan Singh, Sunil Godhwani and two others for allegedly causing wrongful loss worth ₹2,397 crores to Religare Finvest Ltd. The arrests were made after a year-long probe into the affairs of the Singh brothers. 

The EOW also arrested Malvinder Singh on Friday evening.

Sources told India Today that EOW has found Singh brothers fudged audit books and even gave loans to shell companies that were controlled by them. Loans over Rs 47,000 crore was given in a period of 10 years, while the total loss shown on paper stood at Rs 2,397 crore.

“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,” a Delhi Police said in a statement.

The two others arrested are Kavi Arora and Anil Saxena, who held senior managerial positions at Religare Enterprises. The accused, 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.

Religare Fraud Explained

The Singh brothers were promoters of financial firm Religare Enterprises and hospital operator Fortis Healthcare till last year. Godhwani was the chairman and managing director of Religare Enterprises till 2016.

The arrests were made based on a complaint filed by Religare Finvest when it alleged that the three people had misappropriated funds of the company amounting to ₹740 crores through loans to entities that were related to them. 

Religare Finvest named N.K. Ghoshal, an associate of the promoters, along with directors of the promoter companies.

In December, Religare Enterprises and its subsidiary made another complaint to the corporate affairs ministry alleging misappropriation of funds worth ₹2,230 crores of the company and its units. The complaint also alleged that illegal issuances led to undue gains of approximately ₹290 crores to promoter groups.

In August, the Enforcement Directorate (ED) searched the residences of the Singh brothers in New Delhi. The searches were made after ED registered a case against the duo under the Prevention of Money Laundering Act (PMLA), following allegations of financial irregularities. 

In February, Malvinder Singh filed a criminal complaint against Shivinder alleging financial fraud.

Fortis Healthcare Fraud

The accused, Singh brothers, Godhwani and N K Ghoshal were also involved in an alleged financial fraud at Fortis Healthcare too when a case was filed with Sebi and the Serious Fraud Investigation Office for recovery of around ₹500 crores from the brothers.

The brothers made the headlines in the past for siphoning around Rs 472 crore from Fortis Healthcare, and a legal dispute with Japanese drug major Daiichi. A Singapore tribunal had passed a Rs 3,500 crore award in favour of Daiichi Holdings after finding that Singh brothers had concealed information about a US drug regulator probe against Ranbaxy at a time it was sold to the Japanese pharma major.

Fortis had also written to Sebi early this year seeking the initiation of legal proceedings against the Singh brothers including arrest, to recover the dues worth Rs 472 crore. Daiichi, too, is fighting to recover the award from Singh brothers and has urged the Delhi High Court to attach their assets which can be used to recover the dues.

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