Investigating agencies have a task at hand to find out the money trail -- where it had flown and who were the end beneficiaries
On October 11, a local Delhi court sent Malvinder Singh and Shivinder Singh to four-day police custody. The Singh brothers have been accused of causing wrongful loss of Rs 2,397 crore to Religare Finvest (RFL).
Religare Finvest is the NBFC arm of Religare Enterprises, once promoted by Singh brothers. The court observed that the offence was of “very serious nature.”
Along with Singh brothers, former Religare Enterprises MD Sunil Godhwani, ex-CEO of Religare Finvest Kavi Arora and former CFO Anil Saxena, were also sent to police custody.
Malvinder Singh has meanwhile moved the Delhi High Court to quash the FIR against him.
Trail of funds
The Economic Offences Wing (EoW) of Delhi police sought six days for interrogation. However, they have to do it in four days now.
The EoW said that police custody became imperative to find the money trail, to ascertain the utilisation of the borrower money and the role of various officials involved in the disbursement of loans to various entities under corporate loan book.
To be sure, the fall of Singh brothers is unprecedented in Indian corporate history. The brothers were sitting pretty on Rs 10,000 crore cash by 2008-end, following the sale of Ranbaxy. This was at a time when the world was reeling under cash crunch with the collapse of Lehman Brothers and subsequent financial meltdown.
Adding to that, Singh brothers hail from one of the wealthiest Indian corporate families.
The brothers used the cash reserves aggressively to build Fortis Healthcare and Religare. Both companies would go on to build a market cap of $1 billion, as demand for health and financial services grew rapidly in the country.
Even in the aborted acquisition of Singapore hospital chain Parkway, Singh brothers have made a profit of Rs 383 crore.
Both Religare and Fortis were alleged to be milked by Singh brothers in every possible way. The wealth destruction to the tune of around $2 billion, baffles everyone.
A person who had done business with the Singh brothers told Moneycontrol that there was nothing unusual about their lifestyle. Shivinder was described as a teetotaller.
There are hints about money flown into real estate through a cob-web of companies.
Malvinder Singh himself alleged that more than Rs 8,600 crore went to Radha Soami Satsang Beas (RSSB), spiritual commune linked to the family.
But investigating agencies have a task at hand to find out the money trail -- where it had flown and who were the end beneficiaries.To be sure, the Japanese drug maker Daiichi Sankyo, which is trying to execute the Rs 3,500 crore arbitration award against Singh brothers, is also watching the developments with keen interest.