Former Religare promoter Shivinder Singh and former Religare CMD Sunil Godhwani have been arrested by Economic Offences Wing (EOW) of Delhi Police on Thursday. The police also arrested former Religare Finvest MD Kavi Arora and former Religare Group CFO Anil Saxena.
The EOW said in a statement, "The alleged persons systematically siphoned off and diverted money of general public in a clandestine manner for their own benefit."
The action against Singh and Godhwani came in the backdrop of a fund diversion complaint filed by Manpreet Singh Suri of Religare Finvest against Malvinder, Shivinder and Sunil Godhwani, among others. "The alleged persons having absolute control on Religare Enterprises and its subsidiaries put Religare Finvest in poor financial condition by way of disbursing the loans to the companies having no financial standing and control by the alleged persons," the EOW stated.
"These companies wilfully defaulted in repayments and caused wrongful loss to RFL to the tune of Rs 2,397 crore. This was also pointed out and flagged during their independent audit by RBI and SEBI," the agency further added.
Last month, Religare Finvest (RFL), the lending entity of Religare Enterprises (REL), had filed an FIR with the EOW of Delhi Police against brothers Shivinder Singh and Malvinder Singh and Lakshmi Vilas Bank for "cheating, criminal breach of trust by banker, criminal misappropriation and criminal conspiracy".
"The case pertains to the adjustment of RFL deposits to the dues of RHC Holding Pvt Ltd and Ranchem Pvt Ltd," the lender had mentioned in a regulatory filing.
REL was controlled by Malvinder and Shivinder until February 2018. Post their exit on February 14, 2018, the REL and RFL boards were re-constituted. The new REL board had later discovered that one of the major reasons for RFL's terrible financial condition "was the misappropriation by LVB of monies due to RFL on account of four fixed deposits worth Rs 791 crore (including interest incurred on principal amount of Rs 750 crore)".
This misappropriation caused a massive unlawful loss to RFL and, consequently, to all its stakeholders, including the public shareholders, it had added. Lakshmi Vilas Bank last year had said the adjustment of over Rs 790 crore deposits of Religare Finvest, held as security for loans taken by other two firms, was legal and that it was fighting the case in the court appropriately.