Religare fund diversion caseDate: 11 October 2019 Tags: Miscellaneous
Religare Enterprises Ltd promoter Shivinder Singh and his brother were arrested by the Delhi Police for alleged diversion of public money for their own benefit.
The Enforcement Directorate (ED) had carried out searches at the homes of the brothers after revelations from the Mauritius Leaks on their offshore holdings showed great irregularities in their account books.
It is alleged that funds were allegedly diverted from REL, a company listed in India, to a Jersey firm that was solely owned by Malvinder Singh and Shivinder Singh, using a web of offshore companies.
The alleged persons had absolute control on Religare Enterprises Limited (REL) and its subsidiaries that put Religare Finvest Limited (RFL) in poor financial condition by way of distributing the loans to the companies having no financial standing and controlled by the alleged persons.
These companies wilfully defaulted on repayments, causing a loss to RFL to the tune of Rs 2,397 crore to the investors.
Poor financial health of Religare Finvest was to a large extent on account of wilful default on significant unsecured loans, defined for internal purposes as corporate loan book by borrower entities either related, controlled or associated with the promoters.
The loans were given at a non-arms-length basis, which is in violation of corporate governance norms, as well as other regulations for Non-Banking Financial Companies (NBFCs) prescribed by the Reserve Bank of India (RBI).