Religare welcomes ED action in recovery efforts for siphoned funds

The recent action of Enforcement Directorate (ED) - in attaching assets and seeking information from foreign jurisdictions in furtherance of the investigation – bolsters the resolve of the current management of Religare in recovering the siphoned-off funds, said Religare Finvest Limited (RFL) in a statement.

This is with reference to recent media reports stating that the Enforcement Directorate (ED) has attached assets worth more than Rs 124.75 crore belonging to various entities in relation to the investigation pertaining to money laundering and siphoning-off from Religare Finvest Limited (RFL).

Before 2018, the erstwhile management had siphoned off funds by sanctioning and disbursing loans under the Corporate Loan Book (CLB) of RFL. The ED is conducting the investigation, based on the complaint by the current management of RFL against the erstwhile promoters of Religare (Shivinder Mohan Singh and Malvinder Mohan Singh) and their associated persons/entities.

RFL, under its current management, has already repaid more than Rs 9,000 crore to the public banking system of the country, and is committed to recovering its lost assets on account of the actions of the erstwhile promoters and their associates.

Talking to Bizz Buzz, sources familiar with the development said that the Singh brothers left Religare in February 2018, and a new board was constituted. The shareholders at that time decided and constituted a new board. Currently, Dr Rashmi Saluja serves as the Executive Chairperson. There is no promoter in the company. It is a listed entity without any promoter and is managed by a professional management team and board.

There are multiple investors with scattered shareholdings. After the brothers left and a new board was constituted, it was discovered that a significant amount of money, in the order of thousands of crores, had been siphoned off through an NBFC arm, Religare Finvest. Various legal actions were initiated to recover these amounts. One of these cases relates to the corporate loan book portfolio of Religare Finvest.

As part of our overall plan, we filed a criminal case against the Singh Brothers, Gudwani, MK Ghoshal, and other associated individuals. This was filed in December 2018 before the Economic Offences Wing (EOW) in Delhi, the source said.

An FIR was registered in March 2019. The Singh brothers were arrested on October 11, 2019. Additionally, other individuals who were part of RFL management and REL were also implicated. During this period, based on the FIR filed with the EOW, the Enforcement Directorate also filed a case. The recent media articles regarding the attachment of assets pertain to the same case filed by Religare.

The further attachment of assets is based on the same case filed earlier.