Religare Ent, Religare Finvest settle with SEBI in funds fraud case

1 Jun 2022

Religare Enterprises Ltd and its subsidiary, Religare Finvest, have paid settlement amounts of 54.2 mln rupees and 50.9 mln rupees respectively to settle a probe by the Securities Exchange Board of India into their alleged breaches of listing and prohibition of fraudulent practice regulations.

In a settlement order on Tuesday, SEBI said that it had issued a show-cause notice to Religare Finvest for allegedly being a part of a fraudulent and deceptive scheme to divert 24.74 bln rupees from Religare Enterprises to the promoter group entities. Shivinder Singh and Malvinder Singh were the ultimate promoters of Religare Enterprises when the alleged fraud took place.

SEBI was also probing Religare Enterprises for falsifying its consolidated financials and not disclosing on time Reserve Bank of India’s repeated adverse observations on Religare Finvest’s corporate loan book.

SEBI passed another settlement order on Tuesday in the same case against Pankaj Sharma, chief executive officer of Religare Finvest.

Sharma has paid 4.4 mln rupees to settle SEBI’s probe into his alleged failure to carry out adequate due diligence and exercise independent judgement with respect to grant of loans by Religare Enterprises during the period in question.

Religare Finvest had, in January, settled a similar case involving its alleged role in aiding and abetting the routing of funds from Fortis Healthcare to RHC Holdings and consequently to Malvinder Singh and Shivinder Singh, who were part of the promoter group of the Fortis Healthcare when the funds diversion took place.

It paid a settlement amount of 18.2 mln rupees to SEBI in that case.