Shivinder Singh and his elder brother Malvinder Singh, former promoters of pharmaceutical giant Ranbaxy, popular hospital chain Fortis and financial services firm Religare, have been arrested by the Economic Offences Wing (EOW) of Delhi Police in a Rs 740 crore fraud case.
Shivinder was arrested on Thursday evening while Malvinder was arrested late at night after a lookout notice was issued against him. The Singh Brothers have been accused by Religare Finvest of fraud and misappropriation involving around Rs 740 crore.
Former Religare CMD Sunil Godhwani and two others -- Kavi Arora and Anil Saxena -- were also held in connection with the case.
The case against ex Ranbaxy promoters - Malvinder and Shivinder Singh
In December 2018, Religare Finvest Ltd. had filed a complaint against Malvinder Singh, Shivinder Singh and few others. In May, Singh brothers were charged with cheating, fraud and misappropriation of funds.
The Economic Offence Wing (EOW) of the Delhi Police, in a statement post the arrests, said that Manpreet Singh Suri of Religare Finvest Ltd (RFL) had levelled allegations against the Singh brothers, among others.
"The alleged persons having absolute control on Religare Enterprises Ltd and its subsidiaries put Religare Finvest in poor financial condition by way of disbursing the loans to companies having no financial standing and controlled by the alleged persons," the statement said.
These companies willfully defaulted in repayment and caused wrongful loss to Religare Finvest to the tune of Rs 2,397 crore, which was also pointed out and flagged during independent audits by the Reserve Bank of India and the Securities and Exchange Board of India, it said.
Who are Shivinder Singh and Malvinder Singh:
Shivinder Singh and Malvinder Singh are the son of Dr Pravinder Singh, and grandson of Bhai Mohan Singh, the founder of Ranbaxy Laboratories. They were heirs to the multi-billion dollar Ranbaxy. Shivinder Singh was the promoter of Religare Enterprises Ltd, which is the listed company having 85 per cent shareholding of Religare Finvest. Malvinder was the former chairman and CEO of Ranbaxy.
In December last year, Religare Finvest Ltd filed a criminal complaint with the EOW against the brothers. In August, the Enforcement Directorate (ED) searched Singh brothers residences on charges of money laundering. The raids took place after a case was filed against the brothers under the Prevention of Money Laundering Act (PMLA).
Also, in April, the Supreme Court threatened to jail the two former promoters of Ranbaxy, for not complying with an order to pay dues to Japanese firm Daiichi Sankyo.
"We will go into the issue... why you violated our orders. We will send you to jail," the apex court had said. The court was hearing a petition filed by Daiichi Sankyo, which is seeking to recover Rs 3,500 crore awarded to it in an arbitration case by a Singapore tribunal from the brothers.
Malvinder and Shivinder Singh, who in 1999 upon the death of their father inherited their family's 33.5% stake in Ranbaxy, used to be among the twenty richest Indians.