Sebi asks REL, RFL to recall Rs 2,315 crore loan given to Singh brothers & 21 other entities

Sebi also ordered Singh brothers to disassociate themselves from REL and its unit RFL.

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Sebi said REL, RFL and seven other entities had indulged in diversion of funds to the tune of around Rs 2,315 crore.
Mumbai: Markets regulator Sebi has asked Religare Finvest ( RFL) and Religare Enterprises (REL) to recall loans amounting to Rs 2,315 crore given to Malvinder Singh, Shivinder Singh and other 21 entities.

The Securities and Exchange Board of India (Sebi) also ordered Malvinder Singh and Shivinder Singh to disassociate themselves from affairs of REL and its unit RFL in any manner until further directions.

The markets regulator ordered REL and RFL to initiate steps to recall all the loans extended either directly or directly to 22 entities including OSPL Infradeal, Bharat Road Network, Shivi Holdings, Malav Holdings, Malvinder Singh and Shivinder Singh, along with due interest, within three months.


In an order on Thursday, Sebi said that REL, RFL and seven other entities had indulged in diversion of funds to the tune of around Rs 2,315 crore from RFL for the ultimate benefit of the promoters and their related entities, in a fraudulent manner.

“A detailed investigation of the fund diversion in this case is necessary to find out the role of each entity in the alleged routing of funds,” Sebi said in its order.

“However, pending detailed investigation, a remedial action is required to be taken by way of an interim ex-parte order to protect the interests of shareholders of REL as funds to the tune of Rs 2,315.09 crore (approx.) have moved out from RFL for the ultimate benefit of erstwhile promoters of REL,” it added.

Sebi said it had received complaints alleging financial mismanagement and diversion of funds in RFL, for the benefit of promoters and group companies of REL.
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In order to find the ultimate utilisation of funds of RFL, the entire transactions in the bank accounts of the companies and the promoter/ promoter connected entities needed to be examined in detail from FY2008-09 to FY2017-18, Sebi said.

It added that this required analysis of voluminous data in trailing of funds in the bank statements of the RFL, promoter and any other entities that have significant financial transactions with these entities along with the analysis of nature of transactions and underlying documents, and the regulator appointed a forensic auditor for the same on May 10.
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