Introduction

Religare was founded in the year 1982, in the beginning it was a stock brokerage firm named
as Religare Securities Ltd (RSL) and got registered to the National Stock Exchange in 1994.
In the year 2000, it got registered with National Securities Depository Limited (NSDL) and
also got secured membership of the Futures and Options segment of the NSE.
Religare Enterprises Limited (REL) is headquartered in New Delhi, India. One of India’s
leading diversified financial services groups is a subsidiary of Religare Enterprises Limited
(REL). REL offers an integrated suite of financial services through its operating entities and
underlying subsidiaries including loans to affordable housing finance, Small and Medium
Enterprises (SMEs), as well as retail broking and health insurance.

Subsidiaries
 Religare Finvest Ltd (RFL)
 Religare Housing Development Corporation Finance Ltd (RHDFCL)

Shivinder Mohan Singh

He is an Indian businessman and billionaire with Religare, Fortis Healthcare and Ranbaxy
Laboratories. He was the non-executive vice chairman of Fortis Healthcare.

Malvinder Mohan Singh

He is the former chairman and CEO of Ranbaxy Laboratories which is an Indian

pharmaceutical company that was later sold to Japanese drugmaker. Malvinder Singh
resigned in 2009 after Ranbaxy posted losses and after the drugmaker decided to get more
actively involved in the newly acquired Indian unit.

What is the case (in brief)?

Malvinder Mohan Singh and Shivinder Mohan Singh, former promoters of pharma major
Ranbaxy, hospital chain Fortis and financial services firm Religare, who were also the
founders of Religare Enterprises (REL) which had a host of companies such as Religare
Finvest and various other such companies under it. They were also the founder of the hospital
chain Fortis. The main scandal which took place was with Religare Finvest wherein the
company had to bear a loss of Rs 2397 crores owing to the Singh Brothers.
How was the alleged fraud carried out and consequences

The Singh Brothers had absolute control over Religare Enterprises as well as Religare Finvest
up until they lost control following the invocation of shares which they along with the other
promoters had actually pledged with various banks. However, the Singh Brothers still had a
good proportion of ownership in the company which they used to carry out the fraud.

Religare Finvest was a listed NBFC which primarily provided loans to small and medium
enterprises. Religare Finvest Ltd. invested INR 750 Cr in FD in Lakshmi Vilas Bank in year
2016-17. The Singh Brothers used their company Religare Finvest to provide loans to various
shell companies which were owned by these two brothers only and which had no financial
standing whatsoever.

The Singh Brothers owned a total of 19 shell companies and with the help of the power
vested in the top management entities of Religare Enterprises and Religare Finvest, they
allegedly siphoned money to these shell companies some of which were even foreign entities.

A majority of these funds were used to purchase properties and they had no intention of
returning the money whatsoever making it a case of wilful defaulting along with money
laundering.

In July 2017, RFL found out that Lakshmi Vilas Bank credited the proceeds of the fixed
deposits in which RFL invested to the current account of RFL. Also, as an effect to the
amount credited, Lakshmi Vilas Bank, without giving any prior notice or information to RFL,
debited an amount of INR 724 CR.

In response to this allegation, in 2017, December Lakshmi Vilas Bank wrote a letter to RFL.
The letter stated that LVB credited the proceeds of the fixed deposits in the current account of
RFL and debited INR 724 Cr as it was used as collateral by The Singh brothers to get some
loans.

Lakshmi Vilas Bank clarified in that letter that the bank gave loans to RHC holding and
Ranchem Pvt Ltd which were controlled by the Singh brothers and the INR 724 Cr which
was debited was actually used as a collateral by the Singh brothers to get those loans.
Since the shell companies had no financial standings, eventually all of these companies which
were owned by Malvinder and Shivinder Singh defaulted. As a result, Religare Finvest had to
bear the blunt of a loss amounting to INR 2397 crores.

Despite of the clarification given by Lakshmi Vilas Bank, RFL still filed a legal suit in Delhi
High Court against the bank, saying that RFL wasn’t informed about these financial
proceedings in prior and it all happened without any sort of information being shared to them.

Ultimately, after the filing of legal suit against the Shivinder Mohan Singh and Malvinder
Mohan Singh, the Singh brothers were arrested in Oct 2019 by Economic Offence Wing of
Delhi Police for 740 Cr fraud case which led to losses worth INR 2,397 Cr to RFL.

The former MD of Religare Finvest Kavi Arora, former chairman of Religare Sunil
Godhwani and Former CFO of Religare group Anil Saxena have also been arrested along
with the Singh Brothers under the same allegation.

EOW arrested all of them stating that these alleged people have that absolute power and
control of Religare Enterprises Limited (REL) and its subsidiaries. They misused their
control and power to distribute loans to other companies in their control, these loans were
taken in name of Religare Finvest Limited which led to losses of Rs. 2397 Cr to RFL.

The Singh Brothers were found guilty and were arrested under section 409 (criminal breach
of trust by a merchant) and section 420 (cheating) of the Indian Penal Code on October 10th
along with their other associates who were involved in this corporate scam.

Timeline of the Religare Finvest fraud –

• In the month of November 2016 and January 2017, Religare Finvest had invested a sum of
Rs 750 crores with Laxmi Vilas Bank as Fixed Deposits.

• Till the month of July 2017, Religare Finvest kept renewing their deposit.

• In the same month (July 2017), Religare Finvest noticed that while Laxmi Vilas Bank had
credited the interest on the FDs to the company’s current account, at the same time however
they debited a sum of Rs 724 crores without any prior notice or approval from Religare
Finvest Ltd.

• RFL issues several notices and filed legal cases against Laxmi Vilas Bank asking them to
restore their fixed deposit account.

• After many attempts LVB agrees to restore the account of RFL

• In the month of December 2017, RFL receives a letter from LVB claiming that various
loans had been granted to RHC Holding and Ranchem Pvt Ltd amounting to Rs 532 and Rs
174.8 crores respectively. Both of these two companies were owned by the Singh brothers.

• LVB used the FD as a security against the loan which was given to the Singh brothers both
of whom were promoters at RFL with a share of 51% until they were removed in the year
2012.

• RFL however claimed that the loans were security-free and again sought a confirmation
from LVB.

• Moreover, RFL claimed that they had not received any prior notice from LVB regarding
their FD being taken as a security against the loan which the bank gave to RHC Holding and
Ranchem Pvt Ltd respectively. Neither had RFL legally provided any document of approval
which allegedly pledged the FDs against the loan which was given to the two companies.

• This eventually led to RFL filing a law suit against LVB at the Delhi High Court.

• All of these events led to the Enforcement Directorate to file a probe against the Singh
Brothers.

• In the month of August 2018, the ED raided multiple places which were linked to the Singh
Brothers.

• Eventually on October 10,2 018, the Delhi Police arrested the Singh Brothers along with
three of their associates under Section 409 and Section 420 of the Indian Penal Code.

Other frauds and allegations

Apart from the Religare Finvest Fraud, the biggest money laundering case done by the
brothers, the brothers are also involved in other frauds and are alleged for them.

The Singh brothers were the founders of Fortis. The unbridled expansion drives of hospital
backfired at them as huge debe debts started to pile over. Both Religare and Fortis
underwent these expansion drives and both backfired and both the companies soon got
buried under huge pile of debts. Fortis also suffered a lot from these piling debts. And
amongst these situations, the Singh brothers allegedly siphoned a whopping INR 472 Cr
from the hospital chain, Fortis.

Following the legal suit filed by Religare Finvest against the Singh brothers, Fortis also
wrote to SEBI, Securities and Exchange Board of India for getting started with the legal
proceedings for recovering the dues worth INR 472 Cr.

Another legal tussle is the with Japanese Drug giant Daiichi. This story goes back to 2008.
Ranbaxy, the biggest pharma pf India was of the father of Singh Brothers which they
inherited after their father’s death. The brothers decided to sell their shares in order to earn
capital for starting new business ventures, namely Religare and Fortis and few others. The
brothers sold their 33.5% stake to Daiichi which was a Japanese Drug major. The stake
was sold for a whopping INR 9576 Crores

After the sale was made, Daiichi found out that Ranbaxy was facing a US drug regulator
probe. After knowing this fact, Daiichi filed a complaint against the Singh brother for
concealing information regarding to a US drug regulator probe which Ranbaxy was facing
at that time. They kept this fact hidden throughout the entire process of transferring the
company shares.

Ultimately, the Singh brothers lost the case and a Singapore tribunal found them guilty for
concealing this information at the time Ranbaxy was being sold to Daiichi. The tribunal
also passes a INR 3500 Crore award in favour of Daiichi. Daiichi is also chasing the
brothers since then to recover this money. Daiichi has requested the Delhi High Court to
recover this money back by selling off their personal assets.

Although, it is important to keep in mind that the Singh brothers have been arrested on
accounts of Religare Finvest fraud.