Sunil Godhwani, former managing director of Religare, as well as two other key executives Kavi Arora and Anil Saxena, have also been arrested, a statement issued by the EOW said.
“The alleged persons having absolute control on Religare Enterprises
Limited (REL) and its subsidiaries put Religare Finvest
Limited (RFL) in poor financial condition by way of distributing the loans to the companies
having no financial standing and controlled by the alleged persons. These companies
wilfully defaulted on repayments, causing a loss to RFL to the tune of Rs 2,397 crore,” the EOW said while confirming the arrests.
The EOW action followed a complaint filed by Religare Finvest, a subsidiary of Religare Enterprises. Religare Finvest
had last December filed a criminal complaint against the Singh brothers, Godhwani and others for cheating, fraud and misappropriation of company funds to the tune of Rs 740 crore.
The misappropriation came to light after an independent forensic audit was conducted by the new board. The audit followed the exit of the Singh brothers from the company in February.
“Internal inquiries showed that poor financial health of Religare Finvest
was to a large extent on account of wilful default on significant unsecured loans, defined for internal purposes as corporate loan book by borrower entities either related, controlled or associated with the promoters,” Religare had alleged in the complaint with EOW.
The loans, the company said, were given at a non-arms-length basis, which is in violation of corporate governance norms, as well as other regulations for Non-Banking Financial Companies
(NBFCs) prescribed by the Reserve Bank of India (RBI).
In the complaint, Religare Finvest had also said that the Singh brothers and others had cheated the company through misappropriation, siphoning and diversion of funds through a labyrinth of financial transactions.
Calling it a “well thought out and organised criminal conspiracy’’through which a financial scam of huge magnitude had been executed, Religare Finvest said the promoters and executives in question had also siphoned off funds from REL, the parent firm.
REL was controlled by the warring Singh brothers until February 2018.
REL had filed the complaint with the EOW of Delhi Police following an observation made by the Delhi High Court earlier. During a hearing on Daiichi Sankyo's plea for payment of Rs 3,500-crore arbitration award due to them against the Singh brothers, Justice Rajiv Shakdher had observed that if REL was serious about the allegations of defrauding against the former promoters of the company, it should file a police complaint about the same.
Religare moved court, alleging that the Singh brothers, in their capacity as promoters of Religare Enterprises, had siphoned off money from the company by issuing non-convertible redeemable preference share (NCRPS) for themselves and later redeeming them.
About Rs 425 crore had been siphoned off by the two brothers, Religare had then said in its petition.
Earlier in August, the Enforcement Directorate had also raided multiple premises linked to the Singh brothers. The raids were conducted at seven locations in Delhi including those connected to the Singh brothers, Godhwani, and REL executives N K Ghoshal and Hemant Dhingra.