Whistle-blowers allege Singh brothers sold Fortis, Religare-funded assets

Whistle-blowers who claim to be old hands from Religare Enterprises and Fortis Healthcare wrote last month to the Economic Offences Wing, the Securities and Exchange Board of India (Sebi), and the Delhi High Court, alleging that the Fortis promoters, Malvinder Singh and his brother Shivinder Singh, had violated court orders as of August last year by selling assets that included real estate and art bought by funding from their companies. 

Last October, Sebi had directed Malvinder, Shivinder and eight other entities to jointly repay Rs 403 crore, along with interest, to Fortis Healthcare in three months. Further, Sebi had ordered 10 entities, which included Religare Finvest and Fortis Hospitals, not to dispose of any of their assets without permission from Sebi. In addition, the Singh brothers, founders of Fortis Healthcare, had been directed not to associate themselves with the company.

The paintings in question have, the letter suggests, been sold through a “criminal conspiracy” through dealers and names Astaguru Auction House and its directors Vickram Sethi, Tushar Sethi, and Digamber Sethi as primary agents. Astaguru did not return messages or emails asking for a response till the time of going to press and the company's public relations team said it would not comment on the matter. Neither of the brothers replied to emails or text messages on this. 

The letter lists 15 paintings that include two works of the 1950s by FN Souza, two oil paintings by S H Raza, one by V S Gaitonde, a Ram Kumar oil work, an MF Husain from the late 1990s and even a Nicolas Roerich from the 1920s. One art expert said each work was worth at least Rs 3 crore, going up to Rs 7 crore. The letter goes on to explain how the sale of the paintings was carried out to circumvent legal orders to refrain from fund diversion or liquidation of any assets.

Last August, the High Court had restrained the Singhs from operating bank accounts and selling assets, including art, fixed or movable. The letter says the Delhi High Court had questions on a piece of sculpture Malvinder had gifted his daughter.

Ashish Anand, managing director and chief executive officer of DAG, formerly known as the Delhi Art Gallery, founded in 1993, says he follows two practices when buying art from intermediaries. “One is we check the artwork itself for authenticity in terms of brush-stroke, look and feel and form and all that. Once that is done we move to the secondary factor, which is the provenance of the painting and who is selling it to us. This involves getting a signed declaration on a stamped piece of paper that says the art work in question is not pledged and has no lien on it." 

Sandeep Goyal, former chairman of Dentsu and an avid art collector, says it's not always feasible for an art house to zero in on the exact source of a painting, especially if it is a work that is half a century old or more. 

However, he says if a gallery knows that a painting is of a certain vintage, they ought to take preventive steps to ensure that the chain of transaction is as transparent as possible.


Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel