Religare files complaint against Singh brothers, Sunil Godhwani with MCA

Religare Enterprises (REL) and Religare Finvest (RFL) have filed a complaint against former Fortis promoters, Shivinder and Malvinder Singh, and Sunil Godhwani under the Companies Act provisions with the Ministry of Corporate affairs.

The complaint stated that RFL had sanctioned loans to companies known to the Singh brothers but were never repayed. The loans stand at Rs 23.97 billion, with Rs 4.15 billion as interest to 19 entities, adds the complaint reviewed by Business Standard. The complaint has been filed under Sections 210, 212, and 447 of the Companies Act. 

These Sections pertain to fraud, non-convening of the annual general meeting, and filing of profit-and-loss statements for the subsidiaries. The 29-page complaint has been filed by RFL Managing Director and Chief Executive Officer Sanjay Palve and REL Chief Financial Officer Milind Patel, on behalf of the companies.

This comes after a criminal complaint was filed with the Economic Offences Wing of Delhi Police against former promoters of REL, Malvinder Singh and Shivinder Singh, along with other former officials of REL for diverting funds worth Rs 7.4 billion, according to REL’s stock exchange filing.

REL noted that apart from the Singh brothers, a complaint was made against former chairman and managing director of REL, Sunil Godhwani, and other senior officials of the promoter-entities for various offences under the Indian Penal Code, including cheating, criminal breach of trust, misappropriation, and embezzlement of funds and forgery. 

The complaint was filed on the basis of internal inquiries (including an independent forensic review) undertaken by the new RFL board and management. REL was controlled by Malvinder and Shivinder until February 2018. After their exits from the board of REL in February 2018, the boards of REL and RFL were reconstituted. Pursuant to the reconstitution, the REL and RFL boards now comprise professionals not connected to the promoters, REL said. The reconstituted boards have appointed a new professional management to look into the affairs of REL and its subsidiaries. 

This is after the Delhi High Court on December 7 made an observation that it expected REL to file a police complaint against the two for defrauding the company. REL moved court, alleging the brothers had, in their capacity as promoters, siphoned off money from the company by issuing non-convertible redeemable preference shares to themselves and later redeeming them.
Around Rs 4.25 billion had been diverted by the two brothers, REL said in its petition before court.