The agency has charged former Fortis promoters Malvinder and Shivinder Singh and co-accused under provisions of the Prevention of Money Laundering Act (PMLA) and accused them of fund diversion. The brothers have denied any wrongdoing.
Four shell companies were allegedly used by the Singh brothers and other co-accused to send the amount to Hong Kong. The PMLA probe has revealed that this was largely in the form of inter-corporate deposits (ICDs).
ED has also discovered that ₹750 crore was allegedly diverted to erstwhile Lakshmi Vilas Bank by the Singh brothers and co-accused.
A previous investigation launched by the Economic Offences Wing (EOW) of the Delhi Police had found that Lakshmi Vilas Bank officials had, in collusion with the Singhs, deliberately not completed formalities that were mandatory for the loan transaction, in order to benefit the latter, who are promoters of RHC Holding.
People in the know also told ET that several other entities allegedly used for the diversion of funds by the Singh brothers are under the agency’s scanner. Last month, ED searched premises linked to the Essel Group of companies in connection with its probe into Religare Finvest.According to ED, RFL granted ₹150 crore of loans to Essel Group companies in March 2014, which were allegedly defaulted on by way of a fraudulent settlement agreement in January 2018 in connivance with the Singhs. One of the people in the know told ET the ₹150 crore was “diverted” by the brothers in connivance with their co-accused to Essel Group companies.Essel Group last month said it hadn’t participated in any wrongdoing and that full cooperation had been extended to ED. “Essel Group wishes to state, as per the panchnama, no ‘incriminating’ documents were found or seized,” a spokesperson had said. “As far as the ₹150-crore loan is concerned, (it) has been repaid/settled and there was no wrongful loss caused by Essel Group.”
ET was the first to report last week that ED’s Religare Finvest money laundering probe had found that money was diverted to Jersey. The agency recently reached out to authorities in the British tax haven, seeking information via a letter rogatory, which is a formal request for assistance between jurisdictions.
ET had also reported that the agency found that a sizeable amount of money was also allegedly diverted by the Singh brothers to real estate developer M3M India Holdings. ED carried out searches last month at nine Delhi-NCR locations in connection with the money laundering investigation. Apart from RFL’s corporate offices and other sites, it also searched the premises of M3M.
People aware of the matter indicated that the search operation was carried out on the basis of fresh evidence of fund diversion.
RFL’s parent, Religare Enterprises, last month said the ED raids were initiated after a complaint by the company itself. It told the stock exchanges that ED officials, on the “basis (of) a complaint made by the present management of Religare Finvest” and “pursuant to the ongoing investigation with respect to the corporate loan book, collected relevant information/ documents on January 5, 2024, to expedite the investigation as per request made by RFL recently. The information and documents as advised were provided/submitted to the officials of the authority.”
ED has charged the Singh brothers, along with co-accused Sunil Godhwani and others, of being “involved in the process of acquisition, layering, possession, concealment, use and projection of proceeds of crime.”
ET reported last month that ED is readying a supplementary chargesheet against the Singh bothers and others. This will put the spotlight on funds allegedly diverted to foreign shores from RFL and associate companies, as well as all entities employed for this.
The agency has received information from some of the countries where the alleged proceeds of crime were parked, said the people cited above. This will also be detailed in the soon-to-be filed chargesheet.
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