SEBI Thursday ordered Religare Finvest and Religare Enterprises to recall loans worth over Rs 2,300 crore that were diverted to promoters Shivinder Mohan Singh, Malvinder Mohan Singh and 21 other entities after finding preliminary evidence of fund diversions.
Religare Finvest Ltd (RFL) is a subsidiary of Religare Enterprises Ltd (REL). At the end of December 2018, the Singh brothers were among the promoters of REL.
"It was observed that funds amounting to Rs 2,315.09 crore had been diverted from the books of RFL for the utilisation of promoters and promoter group entities of REL," the regulator said in an order.
Noting that a detailed investigation of the fund diversion is necessary to find out the role of each entity in the alleged routing of funds, SEBI said remedial action needs to be taken to protect the interest of shareholders.
The regulator has directed the two companies to "initiate steps to recall all the loans amounting to Rs 2,315.09 crore" along with due interest within three months.
Besides, the Singh brothers have been asked not to associate themselves with the affairs of REL and RFL till further directions.
SEBI said prima facie the role of RFL and REL in the alleged diversion of funds to entities related to the latter's promoters -- RHC Holding and ANR Securities -- for the ultimate benefit of Shivi Holdings Pvt Ltd, Malav Holdings Pvt Ltd, Shivinder Mohan Singh and Malvinder Mohan Singh has been established.
Further, the watchdog noted that non-disclosure of funds routed by RFL through unrelated entities for the benefit of promoters and promoters group entities in the books of the company was to circumvent listing norms.
Apart from the Singh brothers, the loans have to be recalled from 21 other entities. Those include OSPL Infradeal, Bharat Road Network, Platinum Infrastructure, Ad Advertising and Artifice Properties.
The other entities are Best Health Management, Devera Developers, Vitoba Realtors, Fern Healthcare, Modland Wears, Rosestar Marketing, Star Artworks, Tripoli Investment & Trading Co, Volga Management and Consultancy, Zolton Properties, Religare Comtrade, RHC Holding, Ranchem, ANR Securities, Shivi Holdings and Malav Holdings.
The markets regulator had received complaints of alleged financial mismanagement and fund diversions at Religare Finvest for the benefit of promoter group entities of Religare Enterprises.