SEBI Disposes Proceedings Against 16 Entities In Religare Finvest Fund Diversion Case
The Securities and Exchange Board of India on Thursday disposed of adjudication proceedings against 16 entities for their alleged involvement in Religare Finvest’s fund diversion matter.
The entities were alleged to have been involved in the diversion of funds amounting to Rs 2,315.09 crore from the books of Religare Finvest Ltd., a subsidiary of Religare Enterprises Ltd., for the utilisation of promoters and promoter group entities.
Shivinder and Malvinder Singh were promoters of Religare Enterprises.
Further, 14 names have been removed from the list of entities from whom REL and RFL were directed to recover the loan amount, SEBI said in an order.
Among the 16 entities, the names of two entities have already been removed from the list by the regulator.
SEBI, through an interim order in March 2019, had directed REL and RFL to initiate steps to recall all the loans, amounting to Rs 2,315.09 crore, extended directly or indirectly to certain entities -- including the 16 entities -- along with due interest, within three months.
The entities were also directed not to dispose of any of their assets or divert any funds, except for meeting expenses of day-to-day business operations, without the prior permission of SEBI , pending completion of the investigation and till further orders.
Subsequently, SEBI had confirmed thedirections through an order passed in September 2019. However, the directions issued against two entities -- OSPL Infradeal Pvt. Ltd. and Bharat Road Network Ltd. -- were revoked.
Further, the names of OSPL Infradeal and Bharat Road Network were removed from the list of entities from whom REL and RFL were directed to recover the loan amount.
Pursuant to completion of investigation in the matter, SEBI, in an order on Thursday, revoked the directions issued through the interim as well as confirmatory orders against the 14 entities. The watchdog also disposed of the ongoing proceedings against all the 16 entities.
The other 14 entities are Platinum Infrastructure, Ad Advertising, Artifice Properties, Best Health Management, Devera Developers, Vitoba Realtors, Fern Healthcare, Modland Wears, Rosestar Marketing, Star Artworks, Tripoli Investment, Volga Management and Consultancy, Zolton Properties and Ranchem Private Ltd.
Through a separate order, the regulator has disposed of ongoing proceedings against three entities -- Best Healthcare, Fern Healthcare and Modland Wears -- in the Fortis Healthcare case.
It was alleged that the entities were involved in diversion of funds amounting to Rs 403 crore from the books of Fortis Hospitals Ltd., a subsidiary of Fortis Healthcare Ltd. for the utilisation of promoters and promoter group entities.
The issue pertains to the affairs of Fortis, which were being managed by the erstwhile promoters -- the Singh brothers. It was alleged that the Singh brothers had siphoned off the funds of Fortis to promoter-related entities through layers of companies which were controlled by them.
SEBI, in October 2018, had directed FHL to recover Rs 403 crore, along with interest, from nine entities. The regulator had also directed the entities to jointly and severally repay the amount to Fortis Hospitals and FHL.
Besides, the entities were restrained from disposing of the assets pending investigation. The nine entities included Best Healthcare, Fern Healthcare and Modland Wears.
In its latest order, SEBI said it "revokes the directions issued vide the interim order read with confirmatory order against the... 3 noticees (viz. Best Healthcare Pvt. Ltd., Fern Healthcare Pvt. Ltd. and Modland Wears Pvt. Ltd.) and also dispose of the ongoing proceedings... against them".