New Delhi, How were the Singh Bros — Malvinder Mohan Singh (MMS) and Shivinder Mohan Singh (SMS) — the centrifugal forces behind the Rs 3,000 crore Religare Group fraud?
Working in conjunction with CEO Sunil Godhwani (SG), the troika stripped Religare Finvest (RFL) and other group companies bare through a craftily structured construct which allowed them to fly under the radar and even operate with impunity to avoid detailed regulatory supervision of the RBI.
It is pertinent to mention that at the time the loan was extended, SMS, MMS and SG were fully controlling RFL and were acting as its alter egos. Therefore, it is impossible that the aforesaid transaction was carried out without their knowledge and support. In addition to cheating, SMS, MMS and SG are also liable for the offence of criminal breach of trust since RFL and its shareholders had reposed their trust in the said erstwhile promoters and senior management of the parent entity REL and of RFL.
Since the Board of Directors of RFL was accustomed to the act as per their advice and instructions, they thus exercised deep and pervasive control over it.
In this context, it is pertinent to mention that RFL separately also extended loans cumulatively amounting to Rs 120 crore to Vitobha, Best and Devera and even those loans have not yet been repaid, which is indicative of yet another set of fraudulent transactions intended to siphon off monies and cause wrongful loss to RFL, and its shareholders.
Tara Alloys Ltd admits that a loan amount of Rs 85 crore was disbursed on May 24, 2017 by RFL to it taken as a Short Term Loan (for short “the STL”) which carries an interest @14 per cent p.a. Tara alleged that the amount was transferred back to RFL on May 24, 2017 through intermediary companies, allegedly at the behest of RFL to enable to repayment of loans obtained from it by other third parties, within hours of the receipt on the same day. It appears that upon obtaining the loan money from RFL, Tara transferred the same to some other entities and never intended to repay this loan to RFL.
Gurudev Financial Services Pvt. Ltd. admits that the loan amount of Rs 100 crore was disbursed on May 24, 2017 taken as STL, which carries an interest @14 per cent p.a. Gurudev submitted that 5th loan amount of Rs 100 crore obtained from RFL was further transferred to intermediary companies, alleged at the behest of RFL to enable a repayment of loans obtained from it by other third parties, within hours of the receipt on the same day.
It appears from the documents annexed that Gurudev transferred the funds received from RFL to some other entities and never intended to repay the loan to RFKL.
Annies Apparel Pvt Ltd also admits that the loan amount of Rs 100 crore was disbursed on February 1, 2017 by RFL to it as a STL, which carries an interest @14 per cent p.a. The said loan was to be repayable by Annies to RFL on March 31, 2017. Annnies submits that the loan amount was further transferred to intermediary companies, allegedly at RFL’s behest to enable a repayment of loans obtained from it by other third parties, within hours of the receipt on the same day. It appears from documents annexed that the amout has been transferred further by Annnies to other entities and never intended to repay the loan to RFL.
Shri Dham Distributors Pvt Ltd. (earlier known as Abhiruchi Distributors Pvt Ltd) admits that the loan amount of Rs 92.40 crore was disbursed on February 1, 2017 by RFL to it as STL which carries an interest @14 per cent p.a. and the loan amount further transferred to intermediary companies, allegedly at the behest of RFL, to enable a repayment of loans obtained from it by other third parties, within hours of the receipt on the same day. It appears from documents annexed to the reply that the amount has been transferred further by Shri Dham to other entities and it never intended to repay this loan back to RFL.
One needs to add that the all these aforesaid entities are clearly connected and were acting as one economic unit while internal inquiries point to the fact that they are controlled by the brothers’ stockbroker N.K. Ghoshal and the registered office address of the aforesaid entities is also the same – 2764/17, 2nd floor, Hamilton Road, Mori Gate, North Delhi, Delhi 110006.
The plea adopted by the entities is also identical i.e. funds disbursed by RFL were transferred to intermediary companies to enable a repayment of loans obtained from RFL by other third parties. It is evident from the above that while these entities admit receipt of money and admit that since inception of the transaction(s), they never intended to repay the money back to the complainant company. Instead as intended, they transferred the money to certain intermediary companies. The loan(s) advanced to the aforesaid entities were never repaid, and it appears from their replies that they colluded with other entities and amongst themselves (since they are acting as a single economic unit, controlled by one person) to conspire and abet in the siphoning away of money from RFL, thereby causing a wrongful loss to RFL and its shareholders.
In the present case it appears from their admission that RFL was cheated by the directors/persons controlling these entities, which in addition to its directors as the relevant time is believed to be Ghoshal) and the directors and persons controlling the so-called intermediary companies to which the money was transferred, and allegedly in collusion and conspiracy with the erstwhile promoters and senior management of REL/RFL. While the replies do not clearly mention the name of the intermediary companies, the documents annexed to the reply show transactions with many entities who have taken other loans from RFL under the Corporate Loan Book portfolio.
